On April 10, 2017, SUPERVALU INC. (Supervalu), a newly formed
wholly owned subsidiary of Supervalu (Merger Sub), and Unified
Grocers, Inc. (Unified Grocers), entered into an Agreement and
Plan of Merger (the Merger Agreement) to which Supervalu will
acquire Unified Grocers in a transaction valued at approximately
$375 million, comprised of approximately $114 million in cash for
50% of the outstanding stock of Unified Grocers plus the
assumption and payoff of Unified Grocers net debt at closing
(approximately $261 million as of April 1, 2017).

On the terms and subject to the conditions set forth in the
Merger Agreement, at the closing of the transactions contemplated
thereby (the Closing), Merger Sub will merge with and into
Unified Grocers (the Merger) with Unified Grocers surviving the
Merger as a wholly owned subsidiary of Supervalu, and the shares
of Unified Grocers will be converted into the right to receive
from Supervalu at the Closing approximately $114 million in cash
in the aggregate.

As further provided in the Merger Agreement, the consummation of
the transactions contemplated by the Merger Agreement is subject
to certain closing conditions, including (i) approval of the
Merger by the shareholders of Unified Grocers, (ii) any
applicable waiting periods (or extensions thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 having
expired or been terminated, (iii) the absence of any order by any
governmental entity that restrains, enjoins or otherwise
prohibits the Merger, (iv) the accuracy of the representations
and warranties of the parties (generally subject to a material
adverse effect standard), (v) material compliance by the parties
with their respective obligations under the Merger Agreement,
(vi) no material adverse effect having occurred with respect to
the Unified Grocers business after entry into the Merger
Agreement, and (vii) other customary closing conditions. The
transaction is currently expected to be completed in mid- to late
summer 2017.

Under the terms of the Merger Agreement, Supervalu will be
entitled to receive a termination fee of $8,000,000, plus
reimbursement of up to $1,000,000 in costs and expenses, in the
event that the Merger Agreement is terminated by Unified Grocers
under certain circumstances, including as a result of a change in
the recommendation of the board of directors of Unified Grocers.
In addition, a reverse termination fee of $9,500,000 may be
payable by Supervalu to Unified Grocers upon termination of the
Merger Agreement under certain circumstances, including if
Supervalu is unable to obtain antitrust approval before January
5, 2018.

The Merger Agreement contains customary representations and
warranties that are the product of negotiations among the parties
thereto and that the parties made to, and solely for the benefit
of, each other as of specified dates. The assertions embodied in
those representations and warranties are subject to
qualifications and limitations agreed to by the respective
parties and are also qualified in important part by confidential
disclosure schedules delivered in connection with the Merger
Agreement. The representations and warranties may have been made
for the purpose of allocating contractual risk between the
parties to the Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality
applicable to the contracting parties that differ from those
applicable to investors. Investors should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of Supervalu, Unified Grocers, any of their respective
subsidiaries or affiliates or the Unified Grocers business. The
Merger Agreement has been included to provide investors with
information regarding its terms. It is not intended to provide
any other factual information about Supervalu, Unified Grocers,
any of their respective subsidiaries or affiliates or the Unified
Grocers business.

Supervalu expects to obtain representation and warranty insurance
from certain insurers, which will provide coverage for certain
breaches and warranties of Unified Grocers contained in the
Merger Agreement, subject to deductibles, exclusions, policy
limits, and certain other terms and conditions.

In connection with entry into the Merger Agreement, Supervalu
entered into voting agreements with each shareholder of Unified
Grocers that has a representative on the board of directors of
Unified Grocers. The voting agreements require such shareholders
to vote shares over which they have voting control in favor of
the approval of the Merger and the Merger Agreement.

There is no material relationship between Supervalu and Unified
Grocers other than in respect of the Merger Agreement.

The foregoing description of the Merger Agreement does not
purport to be complete, and is qualified in its entirety by
reference to the full text of the Merger Agreement, which is
filed herewith as Exhibit 2.1 and is incorporated herein by
reference.

Item 8.01 Other Events.

On April 10, 2017, Supervalu and Unified Grocers issued a joint
press release announcing the entry into the Merger Agreement.

A copy of the press release is filed herewith as Exhibit 99.1 and
is incorporated by reference herein.

Forward-Looking Statements

Except for the historical and factual information contained
herein, the matters set forth in this communication, particularly
those pertaining to the expected completion of the Merger
(including the timing thereof), the ability to consummate the
Merger (including but not limited to the receipt of all required
regulatory approvals) and Supervalus expectations, guidance, or
future operating results (including expected synergies), and
other statements identified by words such as estimates, expects,
projects, plans, intends, outlook and similar expressions are
forward-looking statements within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially, including the ability to satisfy the closing
conditions and close the proposed acquisition on a timely basis
or at all, the possibility that modifications to the terms of the
transaction may be required in order to obtain or satisfy all
required approvals, business disruption, ability to achieve
operational efficiencies, including synergistic and other
benefits of the proposed acquisition, ability to effectively
retain key employees and maintain and grow customer
relationships, ability to effectively manage organization and
integration changes during the pendency of or following the
transaction, ability to achieve expected financial results for
the combined entity and other risk factors relating to our
business or industry as detailed from time to time in Supervalus
reports filed with the SEC. You should not place undue reliance
on these forward-looking statements, which speak only as of the
date of this news release. For more information, see the risk
factors described in Supervalus Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and other filings with the SEC.
Unless legally required, Supervalu undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

*Schedules and exhibits omitted to Item 601(b)(2) of Regulation
S-K. The registrant agrees to furnish supplementally a copy of
any omitted schedule or exhibit to the SEC upon request.

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to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

EXHIBIT INDEX>

*Schedules and exhibits omitted