Supermarket operator Supervalu will have one fewer chain in its portfolio soon, after announcing that it’s selling off discount grocer Save-A-Lot to a Canadian investment group for $1.37 billion.
The sale to Toronto-based Onex Corp. should come as no surprise to anyone in the supermarket world, notes the Minneapolis Star-Tribune, as Supervalu has been working for a year to sell Save-A-Lot’s chain of 1,368 stores.
After dumping the discount grocer, Supervalu, which is based in Eden Prairie, MN, will be left as mostly a food wholesaler, with a division of supermarkets that operate under different names, including Cub Foods and Shop ‘N Save. The chain is one of the country’s largest discount grocery lines, reaching more than five million shoppers a week, Supervalu says.
Some of the money — about $750 million — from the sale will go toward prepaying a term loan, while the rest will be used to reduce debt and improve capital structure, the company said in a statement.
“Today’s announcement is the result of a thorough process to maximize the value of the Save-A-Lot business and best position Supervalu for future success,” said Jerry Storch, Supervalu’s chairman.
Supervalu sells Save-A-Lot chain for $1.4 billion [Minneapolis Star-Tribune]
by Mary Beth Quirk via Consumerist