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Klaff Realty, together with JV partners, acquires Albertsons for $2.3 billion in a deal led by Cerberus Capital Management

A consortium consisting of three separate investment groups: 1) SUPERVALU INC. (NYSE: SVU) 2) CVS Corporation (NYSE: CVS) 3) A Cerberus Capital Management, L.P.-led investment group, has agreed to acquire Albertsons, Inc (NYSE: ABS) in a transactions valued at $17.4 billion in the aggregate. The Cerberus-led investment group includes Klaff Realty, LP, Kimco Realty Corporation (NYSE: KIM), Lubert-Adler Partners and Schottenstein Stores Corporation.

1) SuperValu Inc. will acquire Albertson’s Inc., in a transaction valued at $12.4 billion.  SuperValu will acquire 1,124 grocery stores from Albertsons for $6.3 billion in stock and cash as well as the assumption of $6.1 billion in debt. The company will acquire the operations of Acme Markets, Bristol Farms, Jewel-Osco, Shaw’s Supermarkets, Star Markets, and Albertson’s banner stores in the Intermountain, Northwest and Southern California regions. Supervalu will also acquire the related in-store pharmacies under the Osco and Sav-on banners. The acquisition makes SuperValu the No. 2 traditional grocer in the United States behind Kroger.

2) CVS Corporation (NYSE: CVS) will acquire 700 of Albertsons’ stand-alone Sav-on and Osco pharmacies for $2.9 billion.

3) The Cerberus-led group will acquire all 661 Albertsons stores and various surplus real estate assets in Dallas/Ft. Worth, Northern California, Florida, the Rocky Mountains and the Southwest for $2.3 billion.  These 5 markets represent the under-performing markets currently run by Albertsons, Inc.  The group plans to operate the stores under the Albertsons name on an ongoing basis, turnaround the operations and rationalize the store base.  The stores’ square footage is in excess of 45 million square feet and report sales revenue in excess of $10 billion.

At the time of sale, Albertsons is one of the world’s largest food and drug retailers, with annual revenues of approximately $38 billion. Based in Boise, Idaho, the Company employs more than 200,000 employees and operates approximately 2,300 retail stores in 31 states across the United States, under banners including Albertsons, Jewel-Osco, Acme, Albertsons-Osco, Albertsons-Sav-on, Sav-on Drugs, Osco Drug, Max Foods and Super Saver.