Albertson's Buyout

Albertson's, Inc. (ABS)
$11.3B Buyout

Summary

Grocery chain to be split up among buyers

Supervalu, CVS, Cerberus-led investor group

Supervalu to acquire most of Albertson's stores

For $6.3B in stock and cash; Assume $6.1B in debt
Will become 2nd largest US grocery chain
Summary
Background
SVU stock chart

Announced 1.23.06

Closed 6.01.06

Advisors

Financial

ABS: Goldman / Blackstone / Houlihan Lokey
SVU: Lazard

Legal

ABS: Jones Day / Sullivan & Cromwell
SVU: Wachtell Lipton

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I Definitions

1.1 Certain Defined Terms
1.2 Other Defined Terms

Article II Merger

2.1 The Diamond Merger
2.2 The Emerald Merger
2.3 Closing; Effective Time
2.4 Effects of the Mergers
2.5 Certificate of Incorporation; By-Laws
2.6 Directors and Officers

Article III Effect of the Mergers on Capital Stock of the
Constituent Corporations

3.1 Effect of the Diamond Merger on Capital Stock
3.2 Effect of the Emerald Merger on Capital Stock
3.3 Treatment of Options and Other Equity Awards
3.4 Adjustment of Merger Consideration
3.5 Dissenting Shares
3.6 Payment and Exchange of Certificates

Article IV Company, New Diamond, and New Diamond
Merger Sub Representations and Warranties

4.1 Organization
4.2 Authority; Enforceability
4.3 Non-Contravention

4.4 Governmental Consents
4.5 Capitalization of the Company
4.6 Company Subsidiaries

4.7 SEC Reports; Financial Information
4.8 No Undisclosed Liabilities
4.9 Absence of Certain Changes or Events

4.10 Contracts
4.11 Compliance with Law and Reporting Requirements
4.12 Litigation
4.13 Employee Compensation and Benefit Plans; ERISA
4.14 Labor Matters
4.15 Properties

4.16 Tangible Personal Property
4.17 Intellectual Property; IT Systems
4.18 Environmental Laws
4.19 Taxes
4.20 Insurance
4.21 Rights Plan
4.22 HITS
4.23 Affiliate Transactions
4.24 Brokers
4.25 State Takeover Statutes
4.26 Fairness Opinion

Article V Parent/Acquisition Sub Reps

5.1 Organization
5.2 Authority; Enforceability
5.3 Non-Contravention

5.4 Governmental Consents
5.5 Capitalization
5.6 SEC Reports; Financial Information
5.7 No Undisclosed Liabilities
5.8 Absence of Certain Changes or Events
5.9 Compliance with Law and Reporting Requirements
5.10 Litigation
5.11 Financing
5.12 Brokers
5.13 Company Stock
5.14 Acquisition Sub
5.15 Fairness Opinion
5.16 Cub Stores Divestiture

Article VI Additional Agreements

6.1 Conduct of Business Prior to the Closing
6.2 Stockholders Meetings
6.3 Proxy Statement
6.4 Access to Information
6.5 Acquisition Proposals
6.6 Further Action; Reasonable Best Efforts
6.7 Resignations
6.8 Directors and Officers Indemnification and Insurance
6.9 Public Announcements
6.10 Cooperation
6.11 Notification
6.12 Third-Party Consents
6.13 Employment and Employee Benefits Matters; Section
16
6.14 Board Representation
6.15 Available Cash
6.16 Coordination of Dividends
6.17 The Diamond Reorganization
6.18 Boise Operations and Community Involvement

Article VII Closing Conditions

7.1 Mutual
7.2 Parent and Acquisition Sub
7.3 Company, New Diamond and New Diamond Merger Sub

Article VIII Termination, Amendment and Waiver

8.1 Termination
8.2 Effect of Termination
8.3 Expenses
8.4 Amendment
8.5 Waiver

Article IX General Provisions

9.1 Non-Survival of Representations, Warranties and
Agreements
9.2 Company Disclosure Letter; Parent Disclosure Letter
9.3 Notices

9.4 Severability
9.5 Entire Agreement
9.6 Assignment

9.7 No Third Party Beneficiaries
9.8 No Responsibility for Other Parties
9.9 Governing Law

9.10 Specific Performance; Jurisdiction
9.11 Waiver of Jury Trial
9.12 Interpretation
9.13 Counterparts

Other Agreements

Merger agreement

Purchase and separation agreement

Asset purchase agreement

Proxy Solicitation

Form S-4 3.14.06

Table of contents

S-4 Amendment #2 4.28.06
S-4 Amendment #1 4.18.06

Deal Protection

No shop covenant

Merger agreement §6.5
Proxy statement disclosure scroll down to page 107

Break-up fee

$276mm, plus out-of-pocket expenses
Agreement §8.2
Proxy statement disclosure

Regulatory Approvals

HSR Act

Merger agreement §6.6(c)
Proxy statement disclosure

Fairness Opinion

Goldman fairness opinion

Proxy statement disclosure

Blackstone fairness opinion

Proxy statement disclosure

Goldman and Blackstone financial analyses opinion

Proxy statement disclosure

Houlihan Lokey fairness opinion

Proxy statement disclosure

Lazard fairness opinion

Proxy statement disclosure

Tax Matters

Disclosure

Proxy statement disclosure

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