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Kroger, which is the largest U.S. supermarket chain, has 2,685
stores in 35 states and the District of Columbia. Its stores
operate under various brand names, including Ralphs, King
Soopers, Smith’s and Fred Meyer.
The transaction includes $1.25 billion in cash and the
assumption of approximately $400 million in outstanding
liabilities, the companies said Wednesday.
“Giant Eagle is a well-run, high-quality regional grocer with a
strong reputation for fresh products, pharmacy, private label
and customer loyalty,” Kroger CEO Greg Foran said in a
statement. “We evaluated the opportunity carefully and the
strategic fit is clear."
Foran, a former Walmart executive, was named Kroger's CEO in
February.
Kroger and other traditional grocers have been squeezed in
recent years as consumers do more of their food shopping at big
retailers like Walmart, Costco and Amazon and discount chains
like Aldi.
In 2022, Kroger announced a plan to merge with rival Albertsons,
arguing that a larger chain would be better able to compete
against rivals. But the Federal Trade Commission and two states
— Washington and Colorado — sued to block the merger in 2024,
saying it would raise prices and lower workers’ wages by
eliminating competition. The proposed merger was scrapped in
late 2024 after judges overseeing two separate cases both halted
the deal.
Burt Flickinger, a longtime grocery industry analyst and
managing director of Strategic Resource Group, a market research
company, called Kroger's acquisition of Giant Eagle “a master
stroke” that gives Kroger a gateway to the mid-Atlantic, the
Northeast and New England.
“There should be no antitrust concerns because Kroger
consistently lowers prices when it makes acquisitions,"
Flickinger said.
The deal, which is subject to regulatory approval, is expected
to close next year. Kroger and Giant Eagle said they anticipate
having to divest a limited number of Giant Eagle stores in order
to receive the necessary regulatory clearance.
Kroger's shares were flat in afternoon trading Wednesday.
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