PE firm Cerberus to acquire five supermarket chains from Supervau for $3.3 bn

Supervalu Inc, the third-largest grocery store operator in the US, yesterday agreed to sell five of its supermarket chains to a consortium led by private equity firm Cerberus Capital Management

The Eden Prairie, Minnesota-based company is selling five of its biggest grocery chains  that includes 877 stores of Albertson's, Acme, Jewel-Osco, Shaw's and Star Market, for $100 million in cash and more than $3 billion in debt.

The consortium includes Kimco Realty Corp, Klaff Realty, Lubert-Adler Partners, and Schottenstein Real Estate Group.

As part of the deal, the consortium will launch a tender offer for up to 30 per cent of Supervalu's shares at $4 per share after the deal closes, representing a 50 per cent premium to the 30-day average closing share price.

Following the sale, Supervalu will consist of the Independent Business, a leading food wholesaler which services 1,950 stores across the country, Save-A-Lot, the largest hard discount grocery chain in the US, with approximately 1,300 stores, and Supervalu's leading regional retail food banners Cub, Farm Fresh, Shoppers, Shop 'n Save and Hornbacher's.

Post sale, Supervalu said that it expects to generate annual revenue of more than $17 billion, down from $35 billion in the fiscal year ended in February 2012.