- Title: Kroger strikes $25 billion deal for Albertsons to create supermarket titan
- Date: 14th October 2022
- Summary: WASHINGTON, D.C., UNITED STATES (OCTOBER 12, 2022) (REUTERS) PROTESTERS CARRYINGA BANNER THAT READS: (English) 'WORLD BANK: BREAK UP WITH OIL' VARIOUS OF PROTESTERS MARCHING AT THE WORLD BANK CHANTING: 'WORLD BANK, GET YOUR ASS OUT OF COAL, OIL AND GAS' (SOUNDBITE) (English) PROTESTER, CATHY BORTOLOMEO, SAYING: "This is a terrible thing for the World Bank to be doing. They
- Embargoed: 28th October 2022 15:41
- Keywords: Albertsons Kroger grocery stores mergers supermarket
- Location: MORRO BAY, CALIFORNIA; GROVETOWN, GEORGIA; UNKNOWN LOCATION; UNITED STATES
- City: MORRO BAY, CALIFORNIA; GROVETOWN, GEORGIA; UNKNOWN LOCATION; UNITED STATES
- Country: US
- Topics: Company News Markets,Economic Events,United States
- Reuters ID: LVA002233714102022RP1
- Aspect Ratio: 16:9
- Story Text: U.S. grocer Kroger Co said on Friday (October 14) it will buy smaller rival Albertsons Companies Inc in a $24.6 billion deal, creating a supermarket behemoth to take on leader Walmart Inc .
Kroger will pay $34.10 for each Albertsons share, representing a premium of about 33% to the stock's closing price on Wednesday, a day before media reports emerged of a deal between the two.
The mega merger between the No. 1 and 2 standalone grocers in the United States will bring together over 2,200 Albertsons locations and more than 2,700 Kroger stores, including banners such as Ralphs and Fred Meyer.
But it stands to draw plenty of regulatory scrutiny, with some analysts saying the deal could stifle competition and lead to higher prices for American shoppers.
In a move that could help ease those concerns, the companies said they expect to divest some stores and Albertsons is ready to spinoff a standalone unit to its shareholders immediately before the Kroger deal closes. The new public company is estimated to comprise between 100 and 375 stores.
Market leader Walmart has been doubling down on its own grocery business and has traditionally used its scale to demand the lowest possible prices from food and beverage suppliers, leaving rivals at a disadvantage in price negotiations.
The Kroger-Albertsons merger would give them an edge over negotiations on product prices with suppliers including consumer goods companies, at a time when prices of groceries and essentials are soaring in the country.
Kroger said it expects to reinvest about half a billion dollars of cost savings from deal synergies to reduce prices for customers. An incremental $1.3 billion will also be invested into Albertsons.
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