May 17, 2024

Kroger, Albertsons to sell 166 more stores with $25B merger in limbo


Kroger and Albertsons stated Monday the 2 corporations are rising the variety of grocery stores they sell to C&S Wholesale Grocers to deal with federal regulators’ considerations concerning the impression of their proposed $25 billion merger on competitors.

An extra 166 Kroger and Albertsons stores will probably be bought to C&S as a part of an up to date divestiture settlement between the three corporations. The authentic divestiture plan included the sale of 413 stores, in addition to eight distribution facilities, two workplaces and 5 personal label manufacturers.

The new settlement will see C&S pay about $2.9 billion in money for the stores — a rise from the $1.9 billion payout beneath the unique divestiture plan. That acquisition would go away C&S with 579 stores plus entry to the Albertsons Signature and O Organics personal label manufacturers.

“We have reached an agreement with C&S for an updated divestiture package that maintains Kroger’s commitments to customers, associates and communities, addresses concerns raised by regulators, and will further ensure that C&S can successfully operate the divested stores as they are operated today,” Kroger CEO Rodney McMullen stated in a press launch.

KROGER-ALBERTSONS MERGER: IS IT GOOD OR BAD FOR SHOPPERS?

A split image of Kroger and Albertsons storefronts

Kroger and Albertsons plan to sell a further 166 stores to C&S Wholesale Grocers forward of their proposed merger. (Kroger: Charles Bertram/Lexington Herald-Leader/Tribune News Service through Getty Images | Albertsons: Shelby Tauber/(*166*) through Getty Images / Getty Images)

“Importantly, the updated divestiture plan continues to ensure no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages,” McMullen added.

C&S Wholesale Grocers CEO Eric Winn stated that the corporate is “confident this expanded divestiture package will provide the stores, supporting assets and expert operators needed to ensure these stores continue to successfully serve their communities for many generations to come.”

Winn added that C&S seems ahead to “welcoming storied banners, quality private label brands, and a team of experienced retail associates into the C&S family. This amended agreement enables C&S’s heritage of selection, value and customer service to continue our legacy of braggingly happy customers.”

KROGER-ALBERTSONS MERGER IN JEOPARDY

A shopper is seen in a grocery store in Miami

Albertsons and Kroger plan to sell stores and different belongings to C&S Wholesale Grocers to transfer ahead with their merger. (Joe Raedle/Getty Images / Getty Images)

Kroger first introduced its plan to purchase Albertsons in October 2022, and the preliminary divestiture package deal was introduced in September 2023.

Ticker Security Last Change Change %
KR THE KROGER CO. 56.93 +0.36 +0.64%
ACI ALBERTSONS COMPANIES 20.23 -0.12 -0.59%

The Federal Trade Commission (FTC) and eight states filed a lawsuit in February 2024 to block the proposed merger, arguing the deal would undermine competitors in the grocery retailer market by elevating costs for shoppers, closing stores and ensuing in job losses.

SOME DEMOCRATS IN CONGRESS CALL ON FTC TO BLOCK ALBERTSONS-KROGER MERGER

FTC chair Lina Khan testifies before Senate committee

FTC Chairwoman Lina Khan and her company have sued to block the Albertsons-Kroger merger. (Al Drago/(*166*) through Getty Images / Getty Images)

A district court in Oregon will maintain a listening to in August on the FTC’s request for a preliminary injunction to block the deal.

Tom Geiger, spokesperson for UFCW 3000, which represents Kroger and Albertsons unionized employees in Washington, Oregon and Idaho, stated that members are involved that C&S would possibly resort to promoting the true property of stores if it lacks the required IT infrastructure, buyer loyalty and manufacturing capabilities.

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Reuters reported that authorized advisers shut to the transaction and divestiture plan stated Kroger and Albertsons are attempting to present C&S with a enterprise that it could possibly run successfully by rising distribution capability that can create a density of native retailer networks to support its enterprise.

Reuters contributed to this report.



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