UNFI acquires Supervalu for $2.9 billion

In a merger agreement on July 26, United Natural Foods Inc. (UNFI) is to acquire Supervalu for $32.50 per share, amounting to roughly $2.9 billion. The deal marks Supervalu’s exit from the grocery retail business and creates one of North America’s largest food wholesalers with a diverse customer base. UNFI, that serves Whole Food Markets, will distribute natural and organic products to traditional grocery stores through Supervalu.

“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 CEO and Chairman.

“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,” Spinner said.

Spinner will lead the combined entity and Sean Griffin, UNFI’s COO, will lead Supervalu’s integration efforts after the agreements close.UNFI plans to divest Supervalu’s retail operations such as Cub Foods and Hornbacher’s over time.

“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, Supervalu’s CEO.