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MINNEAPOLIS and BRATTLEBORO, Vt. - Supervalu Inc. and C&S Wholesale Grocers have agreed to a major swap of assets whereby the Minneapolis-based wholesaler and retailer will acquire former Fleming Midwest operations from C&S to help boost its efficiency and generate growth. Brattleboro, Vermont-based C&S, in turn, will buy Supervalu's New England operations in a transaction that is expected to close by mid-September.
Commenting on the transaction, Supervalu chairman and CEO Jeff Noddle said, "Our interest in acquiring former Fleming assets centered on generating growth and improving efficiencies in our overall logistics business. Similarly, C&S looked to expand its business in New England by adding a strong independent customer base to its operations. Supervalu's New England business will complement C&S' growth strategy with premier independent retailers. The asset exchange agreement with C&S provides a unique opportunity to achieve our mutual growth objectives. Our goal is to become a more effective logistics partner to all of our retailers. In today's increasingly competitive retail environment, our strength is their strength."
C&S chairman and CEO Rick Cohen said, "C&S has been proudly serving customers in New England for more than 85 years and we look forward to long and mutually beneficial relationships with Supervalu's great customer base in New England. The acquisition of these operations and hiring of these employees will greatly enhance the retail and other services we provide to our newly acquired and existing independent and regional chain customers. We are working hard to ensure a seamless transition. The Fleming Midwest operations will fit in well with Supervalu's existing distribution network."
Supervalu will acquire former Fleming Midwest operations from C&S, which includes customer supply agreements, inventory, trade names Sentry Foods and Festival Foods, and real estate holdings in La Crosse and Waukesha, Wis. Fleming will shutter its three facilities in La Crosse and Waukesha, Wis. and Massillon, Ohio, whose customers will now be serviced from Supervalu's existing Midwest facilities.
Meanwhile, C&S will acquire Supervalu's New England operations, which primarily include customer supply agreements, inventory, three distribution centers in Portland, Maine; Andover, Mass.; and Cranston, R.I., and a closed, leased facility in Suffield, Conn.
The exchange follows C&S' Aug. 23 transaction when C&S orchestrated the purchase and sale of many of Fleming's assets to other buyers, as well as retaining Fleming's California and Hawaii operations.
Supervalu said it would provide more detail on the transaction when it announces the results for its second quarter on Oct. 8.