(Reuters) - U.S. grocery retailer Supervalu Inc SVU.N said on Thursday it will sell itself to United Natural Foods Inc (UNFI) UNFI.O, a distributor of natural and organic foods, for $1.35 billion, after coming under pressure from shareholders to explore a sale.

UNFI is the primary supplier for Amazon.com Inc's AMZN.O grocery chain Whole Foods Market. It said on Thursday that the deal would help it diversify its customer base and portfolio. The acquisition could also help it alleviate pressure on rising food distribution costs by tapping Supervalu's network.

“Combining our leading position in natural and organic foods with Supervalu’s presence in fast-turning products makes us the partner of choice for a broader range of customers,” United Natural Foods Chief Executive Steve Spinner said in a statement.

UNFI agreed to pay $32.50 per share in cash, a 67 percent premium to Supervalu’s Wednesday closing price. UNFI shares dropped 16.3 percent to close at $34.48 as investors baulked at the hefty price tag.

The acquisition price was pushed up because UNFI was engaged in a bidding war for Supervalu against C&S Wholesale Grocers, the largest U.S. wholesale grocery supply company, according to people familiar with the sale negotiations who requested anonymity to discuss them. C&S Wholesale Grocers did not immediately respond to a request for comment.

UNFI said it plans to sell some Supervalu retail assets after the deal, which is scheduled to close in the fourth quarter of 2018.

Providence, Rhode Island-based United Natural will fund the acquisition with debt. If the assumption of outstanding debt and liabilities is included, the deal values Supervalu at $2.9 billion.

Supervalu was under pressure to sell itself from investment firm Blackwells Capital LLC, which earlier this year announced a challenge to the company’s board. A Supervalu shareholder vote on that board challenge was set to take place next month.

Goldman Sachs and Foros acted as financial advisers, and Skadden, Arps, Slate, Meagher & Flom LLP and Jones Day LLP acted as legal advisers to UNFI. Barclays and Lazard acted as financial advisers, and Wachtell Lipton Rosen & Katz LLP acted as legal counsel to Supervalu.