Kroger, Albertsons Unveil Updated $2.9B Divestiture Plan
In response to concerns raised by federal and state antitrust regulators, The Kroger Co. and Albertsons Cos. Inc. have amended their definitive agreement with C&S Wholesale Grocers LLC for the sale of assets in connection with their proposed merger.
The merger was first announced in October 2022, and the initial divestiture package (which this amended package modifies) was announced in September 2023.
Subject to customary closing conditions, including Federal Trade Commission approval, on completion of the Kroger-Albertsons merger, C&S will pay Kroger an all-cash consideration of approximately $2.9 billion, including customary adjustments.
According to a joint statement by Kroger and Albertsons, the current divestiture package includes a modified and expanded store set and additional non-store assets to enable C&S to operate competitively following the completion of the merger. Moreover, the updated divestiture plan continues to ensure no stores will close and that all frontline associates will remain employed.
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The updated package boosts the total store count by 166 to encompass 579 stores that will be sold to C&S and maintains the sale to C&S of the QFC, Mariano’s and Carrs banner names. In addition, Kroger will sell the Haggen banner to C&S.
Once the transaction closes, stores under these banners that are retained by Kroger will be re-bannered into one of the retained Kroger or Albertsons Cos. banners.
Following the merger, C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado. In these states, Kroger will re-banner the retained Albertsons and Safeway stores, while maintaining those two banners in the remaining states.
Diving in
The following 579 stores (regardless of banner) will be sold by Kroger to C&S:
Washington: 124 Albertsons Cos. and Kroger stores
California: 63 Albertsons Cos. stores
Colorado: 91 Albertsons Cos. stores
Oregon: 62 Albertsons Cos. and Kroger stores
Texas/Louisiana: 30 Albertsons Cos. stores
Arizona: 101 Albertsons Cos. stores
Nevada: 16 Albertsons Cos. stores
Illinois: 35 Albertsons Cos. and Kroger stores
Alaska: 18 Albertsons Cos. stores
Idaho: 10 Albertsons Cos. stores
New Mexico: 9 Albertsons Cos. stores
Montana/Utah/Wyoming: 11 Albertsons Cos. stores
District of Columbia/Maryland/Virginia/Delaware: 9 Harris Teeter stores
All fuel centers and pharmacies associated with the divested stores will remain with the stores and continue to operate.
In connection with these additional stores being conveyed to C&S, the current divestiture package includes increased distribution capacity, the addition of one dairy facility and an expanded corporate and office infrastructure.
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