US retail chains Kroger and Albertsons, currently ranked No. 1 and No. 2 largest supermarket retailers in the country, have announced that the companies are to merge.
According to a Kroger press release, the merger will expand customer reach and improve proximity to fresh and affordable food to around 85 million households.
Under the terms of the deal, Kroger will purchase the outstanding shares of Albertsons Companies, Inc, common and preferred stock with an estimated value of $34.10 per share, which totals a value of about $24.6 billion, including a net debt of $4.7 billion.
Rodney McMullen, Kroger chairman and CEO said: “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”.
Vivek Sankaran, CEO of Albertsons, added: “Together with Kroger, our combined iconic banners will be able to provide customers with even more value and greater access to fresh food and essential pharmacy services. Given the similarities in the culture and values at Kroger and Albertsons Cos., I am confident that the combination will also have a positive impact on our associates and the communities we are proud to serve.”
At the moment, both retailers employ over 710,000 associates, operate 4,996 stores under different banners, as well as 66 distribution centres, 52 manufacturing plants, 3,972 pharmacies and 2015 fuel centres.
Kroger added that it aimed to invest costs savings to reduce prices, and is also planning to invest $1.3 million in improvements to Albertsons stores.
Source: Kroger / Albertsons