On January 23, 2006, SuperValu, CVS/pharmacy and an investment group led by Cerberus Capital Management, L.P. announced definitive agreements to acquire Albertson’s. Knowing the backgrounds of each company involved is important in understanding how the acquisition affected each company. With every acquisition, legal and ethical issues are present. This transaction significantly impacted all the companies involved economically. Companies must disclose the accounting treatment of the transaction in annual financial statements. The acquisition of Albertson’s reshaped the grocery retail industry by combining multiple companies with strong backgrounds and creating a food retail powerhouse.
SuperValu’s strong background allowed the company to capitalize on market opportunities and acquire Albertson’s. SuperValu offers grocery retail services and is a leader in supply chain services. Before the acquisition, Supervalu operated 1,381 retail locations across seven banners including Cub Foods, bigg’s, Shop N’ Save, and Hornbacher’s. Supervalu’s supply chain services provide more than 2,200 primary customer sites and 227 corporate retail locations. When considering acquiring Albertson’s, SuperValu analyzed the market and saw numerous realities in the grocery retail sector that allowed SuperValu to create new opportunities. At the time of the acquisition, an excess supply of retail space existed and a large number of companies were struggling, setting the stage for major consolidation events. With a 135-year legacy of grocery industry excellence, SuperValu believed the acquisition of Albertson’s would enhance their position in the food retail industry.
CVS Corporation played an integral role in the acquisition of Albertson’s. CVS/pharmacy operates across 38 states and ow ...