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MINNEAPOLIS -- Let the divesting begin. Supervalu Inc. here said yesterday it is selling its standalone Deal$ stores to Dollar Tree Stores, Inc., for approximately $30.5 million in cash, along with a yet-to-be-determined amount of inventory.
St. Louis-based Deal$ has 138 dollar stores in 16 states, and will continue to operate under the Deal$ banner, Chesapeake, Va.-based Dollar Tree said.
Supervalu said the divesture of Deal$ will enable it to focus more on its Save-A-Lot stores.
"Over the past four years, Save-A-Lot has successfully integrated general merchandise" into its stores, said Bill Moran, president and c.e.o. of Save-A-Lot. "We remain focused on further geographic expansion of the Save-A-Lot combination format."
Supervalu said it expects the transaction to be completed during its first fiscal quarter in 2007, subject to customary closing conditions including regulatory approval.
The company anticipates an asset-impairment charge of approximately $9 million, or 6 cents a share, in the fourth quarter of fiscal 2006 as a result of the deal. It said it will release fiscal 2006 year-end results in April.
Deal$ currently operates 138 stores in 16 states: Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Pennsylvania, Tennessee, West Virginia and Wisconsin.
Late last month Supervalu, CVS, and an investment group led by Cerberus Capital Management said they had reached definitive agreements to acquire Boise, Idaho-based Albertsons, Inc. In accordance with the agreements, Supervalu will acquire key retail operations of Albertsons -- a total of 1,124 stores -- among them Acme Markets, Bristol Farms, Jewel-Osco, Shaw's Supermarkets, Star Markets, and Albertsons banner stores in the Intermountain, Northwest, and Southern California regions. The acquisition will also include the related in-store pharmacies operating under the Osco Drug and Sav-on banners.
As a result of the acquisition, Supervalu will become the second-largest supermarket chain in the United States, with annual revenues of about $44 billion.