Albertson’s Sold.

Albertson’s, Inc. announced that it has entered into a definitive agreement to sell the entire company to a consortium of investors for a total transaction value of approximately $17.4 billion in cash, stock and assumed debt, including the settlement of the Albertsons Hybrid Income Term Security units. The value of the transaction to Albertsons’ shareowners is approximately $26.29 per share, as described below, representing a premium of approximately 27 percent based on the company’s closing share price of $20.73 on September 1, 2005, the day before it announced it would explore strategic alternatives.

Members of the consortium involved in the transaction are SUPERVALU Inc. (NYSE:SVU), CVS Corporation (NYSE:CVS), and an investor group led by CERBERUS CAPITAL MANAGEMENT, L.P. that also includes Kimco Realty, Schottenstein Realty, Lubert-Adler Partners, and Klaff Realty, LP.

SUPERVALU will acquire approximately 1124 operating stores and 100 percent of the support operations for Acme Markets, Bristol Farms, Jewel-Osco, Shaw’s, and Star Markets, as well as all Albertsons banner stores in Idaho, Southern Nevada, Utah, Southern California, and the Northwestern US. Also included are all of the combo-store pharmacies, which operate under the Osco and Sav-on banners. These assets combined with SUPERVALU’s existing assets would create a strong new company with 2,656 stores in 48 states plus the District of Columbia and approximately $44 billion in revenues, making it the second largest supermarket company in America.

CVS will acquire 100 percent of the stand-alone drugstore business, which includes approximately 700 freestanding stores as well as a distribution center located in La Habra, California. CVS will also acquire Albertson’s ownership interests in the drug store real estate and intends to sell these interests at or soon after closing in a sale-leaseback transaction. The Sav-on and Osco banners are not part of the sale to CVS. All stand-alone drugstores included in the transaction will be re-bannered as CVS.

The CERBERUS-led consortium will acquire 655 operating stores and 100 percent of the distribution centers and offices in Albertsons’ Dallas/Fort Worth division, and in the Florida, Northern California, Rocky Mountain and Southwestern regions. These stores operate under the Albertsons and Super Saver banners and also include the combo-store pharmacies under the Osco and Sav-on banners. Cerberus has also purchased 26 Cub Stores from SUPERVALU in the Chicago area for an undisclosed amount.