Cincinnati-based Kroger is expanding in a big way.
In a deal that had been rumored earlier but just announced Oct. 14, Kroger plans to purchase Albertsons for about $25 billion, which includes debt. If approved, the merge is expected to close in 2024.
Albertsons is a grocery corporation based in Boise, Idaho, and has about 2,200 stores in 34 states. Kroger and Albertsons are the No. 1 and No. 2 supermarket operators in the country.
According to a joint press release, Kroger would acquire Albertsons and its various supermarket brands, including Albertsons Safeway, Vons, Jewel-Osco, Shaw's and more.
Kroger, whose headquarters is in downtown Cincinnati, already has more than 2,700 of its own stores under names like Food 4 Less, King Soopers, Fred Meyer and Ruler Foods. Together, Kroger and Albertsons would have nearly 5,000 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers in 48 states and the District of Columbia, the release says.
Both Kroger’s and Albertsons’ boards of directors have approved the deal of $24.6 billion.
To pass antitrust regulatory hurdles, Albertsons would divest 100-375 of its stores into a public subsidiary company, SpinCo, which would become a competitor to the merged corporation. SpinCo would be spun off to Albertsons shareholders before the merger.
The overall price of the merger could change depending on how many Albertsons stores are spun off.
“Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores,” Rodney McMullen, chairman and chief executive officer at Kroger, says. “This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors.”
Under the approved plan, McMullen would continue serving as chairman and CEO after the merger. Kroger's current chief financial officer Gary Millerchip also would remain in his role.
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