Kroger to buy Albertsons in $24.6 billion deal

• Kroger has agreed to purchase Albertsons in a deal worth approximately $24.6 billion, the rival supermarket chains announced Friday morning. The companies expect the deal to close in early 2024, subject to regulatory approval.
• Albertsons is prepared to establish a subsidiary immediately prior to the completion of the merger to operate as a standalone public company, which would have between 100 to 375 stores, to satisfy regulatory approval.
• The combination will give Kroger a presence in 48 states and the District of Columbia. Kroger Chairman and CEO Rodney McMullen will remain in those roles after the merger is complete.

After news of negotiations leaked out yesterday, The Kroger Co. and Albertsons Cos. today unveiled a definitive agreement to merge in a deal valued at $24.6 billion.

Under the deal, Cincinnati-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.

The deal will join the first- (Kroger) and second-largest (Albertsons) U.S. supermarket retailers, creating 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.

“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.”