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Super Valu To Buy Portion of Red Owl Stores Inc.

December 2, 1988

EDEN PRAIRIE, Minn. (AP) _ Super Valu Stores Inc. has reached an agreement in principle with Red Owl Stores Inc. to buy the assets of Red Owl’s warehouse and distribution operations, its commercial bakery plant and candy and tobacco company, the companies said Friday.

Terms of the sale were not disclosed.

Super Valu, based in Eden Prairie, will buy Red Owl’s warehouse and distribution facilities in Minneapolis, Fargo, N.D., and Green Bay, Wis., as well as the bakery plant and Jude Candy & Tobacco Co. in Plymouth.

Red Owl, based in Minneapolis, will continue to own and operate the 30 corporate Red Owl retail food stores.

The agreement is subject to approval by the Federal Trade Commission and completion of a definitive contract.

Super Valu said the purchase, when completed, would secure additional distribution capacity to serve the growing business of its independent retailers, as well as Red Owl retailers in the six state Upper Midwest region.

Super Valu, a food wholesaler, services over 2,800 foods stores, virtually all of which are independently owned, in 34 states.

C. Patrick Schulke, president and chief operating officer of Red Owl, said Red Owl management elected to close its warehouse operations and have its independent retailers served by Super Valu.

Schulke and the other owners of Red Owl will concentrate on the operation of the company’s corporate retail stores, which will be supplied by Super Valu upon completion of the transaction.

Super Valu said that on approval of the agreement it will take necessary steps to provide uninterrupted service to independent retailers previously supplied by Red Owl.

Super Valu also said that plans call for the Red Owl distribution centers in Fargo and Green Bay to operate as storage facilities for their existing distribution centers and that Red Owl’s 300,000 square-foot Hopkins warehouse would be expanded and remodeled ″in the near future to roughly double in size.″

Managements of both companies met with employees Friday to announce the agreement.

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