CVS Corporation to Acquire Approximately 700 Stand-Alone Sav-on and Osco Drugstores in $2.9 Billion Transaction

-- Provides Immediate Market Leadership and Scale in Fast-Growing Southern California Drugstore Markets; Boosts Market Share in Other Key Markets

-- Strengthens CVS' Position as America's #1 Retail Pharmacy, Operating 6,100 Drugstores in 42 States

-- Expected To Be Accretive to Earnings and Cash Flow in 2007 and Beyond

CVS Corporation (NYSE: CVS) today announced that it has enteredinto a definitive agreement under which it will acquire approximately700 standalone Sav-on and Osco drugstores, as well as a distributioncenter located in La Habra, California, from Albertsons, Inc., for$2.930 billion in cash immediately preceding the planned merger ofAlbertson's and Supervalu, Inc. Approximately half of the drugstoresare located in southern California, with others in CVS' existingmarkets in numerous states across the Midwest and Southwest. CVS willalso acquire Albertson's owned real estate interests in the drugstoresfor $1.0 billion in cash, and intends to sell these interests at orsoon after closing in a sale-leaseback transaction of equivalentvalue.

Following completion of the transaction, CVS/pharmacy willstrengthen its position as the nation's largest retail pharmacy chainoperating 6,100 stores across 42 states and the District of Columbia.

Tom Ryan, Chairman, President and CEO of CVS Corporation, said:"This transaction offers significant long-term strategic and financialbenefits. It provides immediate market share leadership in thehigh-growth, L.A./Orange County and San Diego markets, which are newmarkets for us, and also strengthens our position in many existingmarkets in the Midwest and Southwest. We expect the transaction to beaccretive to both earnings and cash flow in its first full year.

"The acquisition also provides economies of scale as well as aplatform for further growth in California. The stores we have openedthere to date are performing well ahead of our expectations. However,finding desirable real estate in southern California is challengingand takes longer than in most other parts of the country. Thistransaction offers speed-to-market in these fast-growing regions. Inaddition, we are picking up high-volume stores in our existing states,such as Illinois, Indiana, Missouri, and Arizona. Most of the marketpositions we're gaining are #1 or #2 shares, and these are also largeand growing markets. So we are acquiring high-volume stores withvaluable real estate. And, importantly, we are gaining talentedassociates with a track record of operating successful drug stores,"Mr. Ryan concluded.

CVS expects that the acquisition will enable it to achieve annualcost synergies through economies of scale in advertising, distributionand purchasing, as well as other SG&A efficiencies.

Dave Rickard, Chief Financial Officer, said: "We are purchasingvery high quality assets at a multiple of about 0.5x sales. We expectthis acquisition to be less than 10 cents dilutive to 2006 earningsper share, after integration and non-recurring expenses associatedwith the transaction. In 2007 we expect the acquisition to beapproximately 2 to 4 cents accretive to diluted earnings per share,and in 2008 we expect it to be approximately 5 to 10 cents accretiveto diluted earnings per share. The cash flow effects parallel theearnings effects in terms of dilution and accretion."

CVS expects to finance the transaction with a combination ofshort- and long-term debt. Closing of the transaction, which isexpected to occur in mid-2006, is subject to review under theHart-Scott-Rodino Act, as well as other customary closing conditions.Further, closing is also conditioned on consummation of the mergerbetween Albertson's and Supervalu, which is also subject to reviewunder the Hart-Scott-Rodino Act and other customary closingconditions, as well as approval by the shareholders of Albertson's andSupervalu. Evercore Partners served as financial advisor and DavisPolk & Wardwell served as legal advisor to CVS in this transaction.

CVS will be holding a conference call today for the investmentcommunity at 8:30 a.m. (ET) to discuss this transaction. The call willbe simulcast on the Company's website for all interested parties. Toaccess the webcast, visit the Company's Investor Relations website athttp://investor.CVS.com to hear the call live, or to listen to anarchive of the call which will be available for a one-week periodfollowing the call.

CVS is America's largest retail pharmacy, operating more than5,400 retail and specialty pharmacy stores in 37 states and theDistrict of Columbia. With more than 40 years of dynamic growth in theretail pharmacy industry, CVS is committed to being the easiestpharmacy retailer for customers to use. CVS has created innovativeapproaches to serve the healthcare needs of all customers through itsCVS/pharmacy stores; its online pharmacy, CVS.com; and its pharmacybenefit management, mail order and specialty pharmacy subsidiary,PharmaCare. General information about CVS is available through theInvestor Relations portion of the Company's website, athttp://investor.CVS.com, as well as through the pressroom portion ofthe Company's website, at www.cvs.com/pressroom.

This press release contains certain forward-looking statementsthat are subject to risks and uncertainties that could cause actualresults to differ materially. For these statements, the Company claimsthe protection of the safe harbor for forward-looking statementscontained in the Private Securities Litigation Reform Act of 1995. TheCompany strongly recommends that you become familiar with the specificrisks and uncertainties outlined under the caption "CautionaryStatement Concerning Forward-Looking Statements" in its Annual Reporton Form 10-K for the fiscal year ended January 1, 2005 and in itsQuarterly Report on Form 10Q for the fiscal quarter ended October 1,2005.