Bert Flickinger, managing director of Strategic Resources Group, analyzes the merger between supermarket giants Kroger and Albertsons in “The Claman Countdown.”
Grocery giants Kroger and Albertsons announced their plan to sell more than 400 stores and other assets in connection with a $24.6 billion merger proposed last fall, seeking to pave the way for the grocery chains to join forces.
Kroger and Albertsons have agreed to sell 413 stores nationwide to C&S Wholesale Grocers. Together, the companies employ more than 710,000 people and operate nearly 5,000 stores in 48 states and the District of Columbia.
The plan comes as the companies hope to obtain US regulatory clearance and not violate US antitrust laws.
Kroger and Albertsons merge in $24.6 billion deal
Kroger and Albertsons have agreed to sell 413 stores nationwide to C&S Wholesale Grocers in connection with a $24.6 billion merger proposed last fall. (Reuters/Reuters Photo)
The two companies said they would also sell the QFC, Mariano’s and Cars brand names in a press release announcing their plans. Kroger will also divest private label brands such as Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro.
C&S will also acquire eight distribution centers and two offices in the deal.
“The proposed merger will create meaningful and measurable benefits for American consumers, Kroger and Albertsons partners, and the communities served by Kroger and Albertsons by expanding access to fresh, affordable food and creating a more compelling alternative to large, non-union retailers.” Kruger said.
She continued: “The divestiture plan ensures that no stores will close as a result of the merger, that all front-line associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits along with bargain pay.”
Kroger, Albertsons merger is good for middle-class life: Bert Flickinger
Kroger and Albertsons employ more than 710,000 people and operate nearly 5,000 stores in 48 states and the District of Columbia. (Bridget Bennett/Bloomberg via Getty Images/Getty Images)
Grocery chains have said they must merge to compete with Walmart, Amazon and other major companies that have entered the grocery business.
An agreement could be reached as early as this week, a source told Reuters, adding that it was still unclear whether this would allay regulators’ concerns that Kroger and Albertsons combined would have too much control over grocery prices.
Kroger said the merger will better serve communities by “expanding access to fresh, affordable food and creating a more compelling alternative to large, non-union retailers.” (Scotty Perry/Bloomberg via Getty Images/Getty Images)
The potential deal comes after Aldi announced last month that it would buy about 400 Winn-Dixie and Harveys Supermarket stores across the Southeast in an agreement with parent company Southeastern Grocers.
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“The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills,” Aldi CEO Jason Hart said in a press release.
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