SUPERVALU, CVS And a Cerberus-Led Group Agree to Acquire Albertsons for $17.4 Billion

-- SUPERVALU Will Buy Key Retail Operations Including 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 Under The Osco Drug And Sav-on Banners.

-- Acquisition Triples SUPERVALU's Retail Operations To Become Nation's Second-Largest Supermarket Company.

-- New SUPERVALU to Have Sales of Approximately $44 Billion and EBITDA of $2.7 Billion.

-- Transaction Expected To Be Immediately Double-Digit Accretive To Diluted EPS Excluding One-Time Costs Related To The Transaction

SUPERVALU (NYSE:SVU), CVS (NYSE:CVS) and an investment group ledby Cerberus Capital Management, L.P., including Kimco Realty,Schottenstein Stores Corp., Lubert-Adler Partners and Klaff Realty,announced today that they have reached definitive agreements toacquire Albertson's, Inc. (NYSE: ABS) for $17.4 billion in cash, stockand debt assumption. Under the terms of the agreements, Albertsonsstockholders will receive $20.35 in cash and a fixed exchange ratio of0.182 shares of SUPERVALU stock for each Albertsons share. The valueof the SUPERVALU stock, based on a $32.65 average stock price usingthe 20 day trading average of the closing price of SUPERVALU stockthrough January 20, 2006, is $5.94 bringing total consideration pershare to $26.29. The $17.4 billion purchase price assumes thesettlement of the Albertsons Hybrid Income Term Security units (HITS).The boards of SUPERVALU, CVS and Albertsons, as well as the investmentcommittees or equivalents of the Cerberus-led group, have approved thetransaction.

SUPERVALU will acquire the operations of Acme Markets, BristolFarms, Jewel-Osco, Shaw's Supermarkets, Star Markets, and Albertsonsbanner stores in the Intermountain, Northwest and Southern Californiaregions. SUPERVALU will also acquire the related in-store pharmaciesunder the Osco and Sav-on banners. As a result of the acquisition,which totals 1,124 stores, the new SUPERVALU will become the nation'ssecond-largest supermarket chain. CVS Corporation will acquireapproximately 700 stand-alone Sav-On and Osco drugstores in southernCalifornia, the southwest and Midwest, as well as the distributioncenter in La Habra, California. CVS will also acquire Albertsonsownership interests in the drugstore real estate. The Cerberus-ledgroup will acquire stores in Dallas/Ft Worth, Northern California,Florida, the Rocky Mountains and the Southwest.

SUPERVALU's total consideration is approximately $12.4 billion instock, cash and the assumption of approximately $6.1 billion ofAlbertsons debt. Following the transaction, which is expected to closeduring summer 2006, approximately 65 percent of the new SUPERVALU willbe held by existing SUPERVALU stockholders and approximately 35percent will be held by Albertsons stockholders on a fully dilutedbasis reflecting options, awards and the settlement of the HITS. Thenew SUPERVALU will have approximately 224 million fully diluted commonshares outstanding, compared to approximately 146 million fullydiluted common shares outstanding today.

Proforma combined Fiscal 2006 annual sales of the new SUPERVALUare expected to be approximately $44 billion; with approximately $2.7billion of EBITDA. SUPERVALU EBITDA margins are expected to increaseas a result of the combination by approximately 140 basis points, from4.8% to 6.2%. An additional 30 to 40 basis point improvement isanticipated, reflecting $150 million to $175 million of pretaxsynergies by the end of the third full year. The planned synergies areprimarily related to better economies of scale across the new retailfootprint, optimization of the supply chain network and elimination ofredundant costs. On an annual basis, the transaction is expected toimmediately generate double-digit percent earnings per share accretionwhen excluding one-time costs related to the transaction.

The transaction is subject to approval by both SUPERVALU andAlbertsons stockholders as well as customary regulatory approvals.Jeff Noddle, chairman and CEO of SUPERVALU, will be chairman and CEOof the combined company.

Noddle said, "Today we have put in motion a series of actions thatwill dramatically transform SUPERVALU. We will realize a sizeableincrease in our retail footprint and supply chain network,strengthening our ability to effectively compete in today'schallenging grocery industry. The combination of operations willcreate a premier food retail powerhouse of 2,656 stores from coast tocoast, tripling the size of our current retail operations. By addingprestigious supermarket nameplates across the country, each withstrong market presence in their respective regions, we will have thecritical mass and footprint to leverage the combined operations tobecome a more profitable business."

He continued: "This acquisition is a strategic fit withSUPERVALU's approach of operating a diversified portfolio of regionalbanners - locally managed and branded - with strong prevailing marketshares. We are also, of course, thrilled to join forces with a highlyskilled employee base and look forward to building on our combinedstrengths, cultures and historical roots.

"We have successfully added retail banners to our portfolio ofstores in the past and this gives us confidence that, with thecollective leadership of SUPERVALU and the acquired retail operations,we will achieve the benefits of the combination - a company withbetter potential for growth and profitability than a stand-aloneSUPERVALU. We believe we have acquired the right assets at the rightprice. I'd like to thank our partners in this transaction - both CVSand the Cerberus-led group - for their role in creating a uniquearrangement that will truly benefit all our companies.

"In summary," he added, "for both the SUPERVALU and Albertsonsstockholders, this combination creates a very strong competitor withhigh market penetrations, tremendous brand equities, significant sizeand scale and sufficient financial flexibility."

SUPERVALU has received a binding commitment letter from the RoyalBank of Scotland for the necessary acquisition financing as well asthe ongoing bank facility for the new SUPERVALU. Approximately $6.1billion of Albertsons debt, including $0.7 billion of capital leases,will be assumed by the new SUPERVALU. SUPERVALU expects that its debtratings will be downgraded; however the company is confident that thenewly formed entity will generate sufficient free cash flow to supportits debt service requirements and to improve its overall creditprofile. The new SUPERVALU will not have significant debt maturitiesuntil Fiscal Year 2010.

Lazard served as financial advisor and Wachtell, Lipton, Rosen &Katz served as legal advisor to SUPERVALU. Lehman Brothers, UBSInvestment Bank and J.P. Morgan Securities Inc. were the financialadvisors to the Cerberus-led group.

Investment Community Conference Call and Webcast

SUPERVALU will discuss this transaction on a live conference calland webcast to be held January 23, 2006 at 7:30AM Central Time /8:30AM Eastern Time.

Interested parties are encouraged to access the live webcast onthe SUPERVALU website at www.supervalu.com. Interested parties alsocan participate in the live conference call domestically by dialing(877) 704-5391 or internationally by dialing (913) 312-1301. A replayof the call will be available until February 10, 2006 by dialing (719)457-0820. The replay passcode is 5522264. Copies of the presentationrelated to the transaction webcast will be available at SUPERVALU'swebsite.

Media Conference Call - Q&A only

SUPERVALU will also hold a conference call for the members of themedia at 1:30PM Central Time / 2:30PM Eastern Time. The press canparticipate in the conference call domestically by dialing at (888)802-2266 or internationally by dialing (913) 312-1270.

About SUPERVALU INC.

Celebrating its 135th year of fresh thinking, SUPERVALU INC., aFortune 500 company, is one of the largest companies in the UnitedStates grocery channel. With annual revenues of approximately $20billion, SUPERVALU holds leading market share positions across theU.S. with its 1,532 retail grocery locations, including licensedSave-A-Lot locations. With its Save-A-Lot format, the company holdsthe number one market position in the extreme value grocery retailsector. Through SUPERVALU's geographically diverse supply chainnetwork, the company provides distribution and related logisticssupport services to grocery retailers across the nation. In addition,SUPERVALU's third-party logistics business provides end-to-end supplychain management solutions that deliver value for manufacturers,consumer products retailers and food service customers. SUPERVALUcurrently has approximately 57,000 employees. For more informationabout SUPERVALU visit http://www.supervalu.com.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FORTHE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIESLITIGATION REFORM ACT OF 1995

Except for the historical and factual information containedherein, the matters set forth in this filing, including statements asto the expected benefits of the acquisition such as efficiencies, costsavings, market profile and financial strength, and the competitiveability and position of the combined company, and other statementsidentified by words such as "estimates," "expects," "projects,""plans," and similar expressions are forward-looking statements withinthe meaning of the "safe harbor" provisions of the Private SecuritiesLitigation Reform Act of 1995. These forward-looking statements aresubject to risks and uncertainties that may cause actual results todiffer materially, including required approvals by SUPERVALU andAlbertsons stockholders and regulatory agencies, the possibility thatthe anticipated benefits from the acquisition cannot be fully realizedor may take longer to realize than expected, the possibility thatcosts or difficulties related to the integration of Albertsonsoperations into SUPERVALU will be greater than expected, the impact ofcompetition and other risk factors relating to our industry asdetailed from time to time in each of SUPERVALU's and Albertsonsreports filed with the SEC. You should not place undue reliance onthese forward-looking statements, which speak only as of the date ofthis press release. Unless legally required, SUPERVALU undertakes noobligation to update publicly any forward-looking statements, whetheras a result of new information, future events or otherwise.

ADDITIONAL INFORMATION

SUPERVALU and Albertsons will file a joint proxystatement/prospectus with the Securities and Exchange Commission(SEC). INVESTORS ARE URGED TO READ THE JOINT PROXYSTATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAINIMPORTANT INFORMATION. You will be able to obtain the joint proxystatement/prospectus, as well as other filings containing informationabout SUPERVALU and Albertsons, free of charge, at the websitemaintained by the SEC at www.sec.gov. Copies of the joint proxystatement/prospectus and the filings with the SEC that will beincorporated by reference in the joint proxy statement/prospectus canalso be obtained, free of charge, by directing a request to SUPERVALUINC., 11840 Valley View Road, Eden Prairie, Minnesota, 55344,Attention: Corporate Secretary, or to Albertsons, Inc., 250 EastParkcenter Boulevard, Boise, Idaho, 83706-3940, Attention: CorporateSecretary.

The respective directors and executive officers of SUPERVALU andAlbertsons and other persons may be deemed to be participants in thesolicitation of proxies in respect of the proposed transaction.Information regarding SUPERVALU's directors and executive officers isavailable in its proxy statement filed with the SEC by SUPERVALU onMay 12, 2005, and information regarding Albertsons directors andexecutive officers is available in its proxy statement filed with theSEC by Albertsons on May 6, 2005. Other information regarding theparticipants in the proxy solicitation and a description of theirdirect and indirect interests, by security holdings or otherwise, willbe contained the joint proxy statement/prospectus and other relevantmaterials to be filed with the SEC when they become available.Investors should read the joint proxy statement/prospectus carefullywhen it becomes available before making any voting or investmentdecisions.