SuperValu Sold to United Natural Foods for $2.9 Billion

United Natural Foods (UNFI) and SuperValu have entered into a definitive agreement under which UNFI will acquire SuperValu for approximately $2.9 billion.

"This transaction accelerates UNFI's "Build out the Store" growth strategy by immediately enhancing our product range, equipping us to bring an attractive, comprehensive product portfolio to an expanded universe of customers," said Steve Spinner, UNFI's chairman and CEO. "Combining our leading position in natural and organic foods with SuperValu’s presence in fast-turning products makes us the partner of choice for a broader range of customers. Together, we can provide our "better for you" products as well as other high-growth segments, improving customers' competitive advantages in a dynamic marketplace."

Strategic and financial benefits of the transaction:

• Diversified customer base. Greatly expands UNFI's customer base and exposure across channels. It also unlocks new opportunities through a comprehensive product portfolio.
• Cross-selling opportunities. UNFI will benefit from its ability to deliver comprehensive and expanded offerings, including the addition of high-growth perimeter categories such as meat and produce to UNFI's natural and organic products.
• Expanded market reach and scale. The wider geographic reach and greater scale of the combined entity is expected to increase efficiencies and effectiveness.
• Enhanced technology, capacity and systems. The combined entity will leverage scalable systems to streamline its processes, more efficiently meet the needs of its customers and reduce future capital expenditures.
• Synergies. UNFI is positioned to realize run rate cost synergies of more than $175 million by year three.

"The combination of UNFI and SuperValu provides a substantial premium and delivers certainty of value to our stockholders, meaningful benefits to our customers, expanded opportunities for our employees, and the ability for us and our vendors to efficiently serve a varied customer base," said Mark Gross, CEO, SuperValu. "We have been executing an ambitious strategic transformation for over two years. We believe that this transaction is the best and natural next step for our stockholders, customers and employees."