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Kroger, Albertsons announce plans to merge in $24.6 billion deal

Kroger/Albertsons Kroger, Albertsons to merge in $24.6 billion deal
Cincinnati, Ohio-based Kroger plans to acquire all outstanding shares of Albertsons common and preferred stock, and assume roughly $4.7 billion of Albertsons' net debt.

After news of negotiations leaked on Thursday, The Kroger Co. and Albertsons Companies unveiled on Friday a definitive agreement to merge in a deal valued at $24.6 billion.

Under the deal, Cincinnati, Ohio-based Kroger plans to acquire all outstanding shares of Albertsons common and preferred stock for about $34.10 per share. The total enterprise value of the transaction includes the assumption of roughly $4.7 billion of Albertsons’ net debt.

Kroger, Albertsons to merge in $24.6 billion dealThe deal will join Kroger, the largest supermarket retailer in the United States, and Albertsons, the second-largest, to create a national company with 4,996 stores, 66 distribution centers, 52 manufacturing plants, 2,015 fuel centers and more than 710,000 associates across 48 states and the District of Columbia. The merged entity also would be the fifth-largest retail pharmacy operator, with 3,972 pharmacy locations.

Kroger's Rodney McMullen, who would serve as chairman and CEO of the merged company, said Albertsons will bring a complementary store footprint and 'operates in several parts of the country with very few or no Kroger stores.'

“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” Kroger Chairman and CEO Rodney McMullen said in a statement. “Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. 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.

“As a combined entity, we will be better-positioned to advance Kroger’s successful go-to-market strategy by providing an incredible seamless shopping experience, expanding Our Brands [private-label] portfolio and delivering personalized value and savings,” McMullen explained. “We’ll also be able to further enhance technology and innovation, promote healthier lifestyles, extend our health care and pharmacy network and grow our alternative profit businesses. We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders.”  

supermarket news logoVisit Supermarket News for the rest of this story, an analysis of anti-trust regulations and other news on the Kroger-Albertsons merger. And watch New Hope Network for analysis of this move and its effects on both brands and retailers. Supermarket News, a New Hope Network sister website, covers conventional grocery trends and insights

 

 

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