Supervalu Expanding Albertsons

At a presentation at Lehman Brothers Annual Retail Conference in New York City, Jeffrey Noddle, the company's chairman and chief executive officer, said the $17.4 billion acquisition of select Albertsons stores will give the firm a dominant position in most major markets.

"It really makes us a national powerhouse," Noodle said of the acquisition, which he termed "an unprecedented opportunity" to buy into select markets.

The company will triple its retail operations to 2,656 stores with an estimated $44 billion in revenue when finalizes its purchase of 1,124 stores in Albertsons' stores later this summer. The acquisition, which included Acme Markets, Jewel-Osco, Bristol Farms, Shaw's Supermarkets and Star Markets, makes Supervalu the nation's second biggest grocer next to Kroger Cos. Supervalu will also retain the Osco and Savon pharmacy banners in its 900 pharmacy-based supermarkets, making it the eighth largest pharmacy chain in the country.

"This thing has moved along very steadily. We've had no snags along the way," Noodle said of the transition.The new company plans to name its executive staff, comprised of executives from both Albertsons' and Supervalu, within the next few weeks, he said.

The acquisition gives the new company a strong mix of locally branded stores, each with a strong market presence that will be 90% retail and produce $75 million to $80 million in leverage for the Eden Prairie, MN-based firm.

Supervalu's partners in the purchase include an investment group led by Cerberus Capital Management, LP, which includes Schottenstein Stores Corp., Kimco Realty, Klaff Realty and Lubert-Adler Partners.