National grocery chain seeks merger with Albertsons. What we know about the food giants
Kroger and Albertsons, two of the nation’s largest grocers, are attempting to merge.
Approved by the boards of both companies, the merger agreement says that Kroger will acquire Albertsons, which owns Northern California giant Safeway, for an estimated $24.6 billion, according to a Kroger press release. The acquisition includes the company assuming $4.7 billion of Albertsons’ debt.
The $24.6 billion translates to an estimated $34.10 per share.
What we know about Kroger
Rodney McMullen is the Kroger chairman and chief executive officer and would retain those titles at the combined company, the Associated Press reported. He told the AP that the merger could save $1 billion annually in lower administrative costs, more efficient manufacturing and distribution and shared investments in technology.
Kroger is based in Cincinnati, Ohio, and is the nation’s largest grocer with nearly 2,800 stores in 35 states operating under 28 different names.
In 1983, the company merged with Dillons in Kansas to expand its food, drug and convenience stores coast-to-coast, according to the Kroger website. An even bigger merger came in 1999 when it acquired Fred Meyer Inc. and thereby Smith’s, Ralphs, Food 4 Less and Quality Food Centers.
According to Kroger’s press release, the company plans, through a family of well-known and trusted supermarket banners, to expand customer reach and improve proximity to deliver fresh and affordable food to approximately 85 million households.
How Albertsons has grown
Albertsons Companies is a leading food and drug retailer based in Boise, Idaho. It has more than 2,200 stores across 34 states supplemented by 22 distribution centers and 19 manufacturing plants.
In 1999, Albertsons acquired the parent company of Acme Markets. In 2015, the company acquired Safeway for roughly $34.92 per share, according to a news release. There are approximately 243 Safeway locations in California, eight of those in the Sacramento area. It also owns Lucky Stores, with locations across Northern California.
Albertsons went public in 2020. It tried to merge with Rite Aid in 2018, but the $24 billion deal faced opposition from a number of retail investors, according to NBC News.
Albertsons majority shareholders have either delivered a written consent approving the transaction or are committed to doing so no later than Oct. 18, 2022, according to Kroger’s press release. The transaction is expected to close in early 2024 provided it receives required regulatory clearance and other customary closing conditions.
The Associated Press reports the deal will likely get heavy scrutiny from U.S. antitrust regulators, especially at a time of high food price inflation.
This story was originally published October 14, 2022 at 4:54 PM with the headline "National grocery chain seeks merger with Albertsons. What we know about the food giants."