Kroger, the US grocery retailer, has announced it has reached an agreement to sell its convenience store business to UK forecourt retail firm EG Group for $2.15 billion.
Kroger’s convenience store business operates in 18 states of the USA and includes 66 franchise operations. The stores employ 11,000 associates and operate under the names Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop. Kroger’s convenience store business generated revenue of $4 billion, including fuel sales, in 2016.
As part of the agreement, EG Group will establish its North American headquarters in Cincinnati, OH and continue to operate stores under their established names, the firms said in a statement.
Commenting on the move, EG Group founder and co-CEO Mohsin Issa said: “This is an exciting time for EG Group, the entry into the US market presents a fantastic opportunity to deliver a successful retail offer to consumers across the various states. We have had much success across Europe and we firmly believe the Kroger assets present a fantastic foundation to overlay our retail experience and know-how in the US. We are committed to investing in the Kroger network, partnering with leading retail brands and working with the exceptional management team and associates transferring across to deliver a comprehensive retail offer”.
Kroger said it planned to use net proceeds from the sale to repurchase shares and to lower its net total debt to adjusted EBITDA ratio.
Source: Kroger / EG Group (via PR Newswire)