Introduction
Kroger, one of the largest grocery store chains in the United States, is set to acquire Albertsons, another major grocery store chain, in a mega-merger. This merger will create the largest grocery store chain in the United States, with more than 4,000 stores and $83 billion in annual sales. The merger is expected to bring significant cost savings and operational efficiencies to both companies, as well as create a more competitive grocery store landscape. The merger is also expected to create new opportunities for both companies to expand their product offerings and reach new customers. This merger is a major development in the grocery store industry and could have far-reaching implications for the industry as a whole.
Kroger To Acquire Albertsons In a Mega-Merger
Kroger, the largest grocery chain in the United States, has announced that it will be acquiring Albertsons, the second-largest grocery chain in the country, in a mega-merger. The deal is valued at $24 billion and is expected to close in the second half of 2018.
The merger will create a grocery giant with more than 4,000 stores and $83 billion in annual sales. Kroger will become the second-largest grocery chain in the world, behind Walmart. The combined company will have a presence in 42 states and employ more than 400,000 people.
The merger is seen as a way for Kroger to compete with Walmart and Amazon, which have been aggressively expanding their grocery businesses. Kroger has been struggling to keep up with the competition, and the merger will give it the scale and resources it needs to compete.
Kroger CEO Rodney McMullen said in a statement, “This merger will create an even stronger company, one that is better positioned to compete in the rapidly evolving retail industry. We are excited about the opportunities this merger will create for our customers, associates, suppliers, and shareholders.”
The merger is subject to regulatory approval, but it is expected to be finalized by the end of the year. It will be interesting to see how the merger affects the grocery industry in the coming years.
Two major supermarket chains are planning on becoming one mega-market in a merger that—if all goes well—is expected to be completed in early 2024.
America’s largest grocery chain Kroger is acquiring second-largest rival company Albertsons for a whopping $24.6 billion. The two combined operate about 5,000 stores plus pharmacies and gas stations nationwide, and have made a combined annual revenue of $209 billion last year. The new totals would threaten Walmart, whose grocery sales hit $218 billion, according to The New York Times.
“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” Kroger CEO and Chairman Rodney McMullen says 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 positions as a more compelling alternative to larger and non-union competitors.”
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However, the deal is likely to draw major scrutiny from federal regulators, as it would create a grocery chain monopoly and allow the company to affect prices in a time of soaring food costs. The deal is still subject to the federal antitrust review which could block it from moving forward.
“This is the type of transaction that really looks good on paper, but the actual practicality of achieving regulatory approval by the FTC could be difficult,” Bloomberg Intelligence Analyst Jennifer Bartashus told Bloomberg News.
Kroger and Albertsons say they’ll sell some of their stores to their competitors—and may move between 100 to 375 of their stores into a new stand-alone company to lessen the effects of a monopoly.
Kroger Co. currently has about 2,800 stores in 35 states under banners like Kroger, Ralphs, Dillons, King Soopers, QFC, and Harris Teeter. Albertsons has some 2,200 locations under brands like Albertsons, Vons, and Safeway.