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Supervalu Proposes Reorganizing Its Corporate Structure

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Supervalu Inc. has released a proposal that would result in a reorganization of the company’s corporate structure into a holding company structure. Supervalu says it believes the move will “further facilitate (its) strategic transformation, among other benefits to stockholders.”

The holding company structure is being proposed to:

  • Organize and further segregate Supervalu’s wholesale and retail operations in an operationally efficient and strategic manner, including to separate its wholesale and retail operations;
  • Facilitate the company’s previously announced strategic transformation plan to sell certain retail assets to third parties;
  • Better segregate the liabilities of the company into their respective business segments;
  • Increase Supervalu’s strategic, business and financial flexibility; and
  • Enable the company to achieve its strategic transformation plan in a tax-efficient manner that may facilitate the ability to utilize a material portion of Supervalu’s capital loss carryforward, which could generate approximately $300 million of cash tax benefits for the company over the next approximately 15 years.

“We have been executing a strategic transformation of our business over the last two years to become the wholesale supplier of choice for grocery retailers across the United States, while also executing initiatives to deliver long-term stockholder value,” said Mark Gross, Supervalu president and CEO. “The proposed holding company structure is another significant and important undertaking by our team that would support and advance our transformation by further separating our wholesale and retail operations in a tax efficient manner.”

Supervalu stockholders are being asked to consider and vote on the holding company proposal at the company’s annual stockholders meeting. The proposal and realization of the desired benefits from the reorganization are subject to certain conditions and future events. Additional details of the holding company proposal can be found in Supervalu’s preliminary proxy statement/prospectus, which was filed on June 12 with the U.S. Securities and Exchange Commission.

Headquartered in Minnesota, Supervalu serves customers across the U.S. through a network of 3,437 stores composed of 3,323 wholesale-primary stores operated by customers serviced by Supervalu’s food distribution business and 114 traditional retail grocery stores.

Keep reading:

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