Organic food distributor United Pure Foods (UNFI) has bought Us all grocer Supervalu for $2.9 billion mainly because it aims to expand and branch out its customer base.
UNFI, which is a supplier of Amazon’s Whole Foods Market, stated the deal will unlock fresh opportunities “through a comprehensive product portfolio”.
It predicted the acquisition will allow UNFI to realise operate rate cost synergies of more than $175 million within three years.
Supervalu has annual profits of around $14 billion and will serve customers across the US having a network of 3,437 stores. A year ago it agreed a deal to have grocery wholesaler Unified Grocery for around $375 million.
UNFI CEO Ken Spinner said: “This transaction enhances UNFI’s ‘build out the store’ growth approach by immediately enhancing your product range, equipping us to give an attractive, comprehensive product stock portfolio to an expanded universe of shoppers.
“Combining our leading location in natural and organic foods together with Supervalu’s presence in fast-turning products makes us the partner preferred by a broader range of customers. Together, we can provide your better-for-you products as well as other high-growth segments, strengthening customers’ competitive advantages in a strong marketplace.
“These benefits, plus all of our increased efficiency and productivity, will enable us to create value for the shareholders, enhance opportunities for the suppliers, provide a broader assortment for our customers and create different prospects for our associates over time.”
Supervalu CEO Mark Gross stated: “The combination of UNFI and Supervalu provides a sizeable premium and delivers conviction of value to our stockholders, meaningful good things about our customers, expanded prospects for our employees, and the means for us and our distributors to efficiently serve some sort of varied customer base.
“We have been undertaking an ambitious strategic alteration for over two years. We believe that transaction is the best and pure next step for our stockholders, customers and employees. I am very satisfied with the unwavering commitment while focusing of our employees in traveling our strategic transformation together with serving our customers. I’m confident that, together, Supervalu and UNFI shall be well positioned to succeed