Two Massive, US Grocery Chains Could Be Headed for Merger

Reports have filtered in over the past day that two of the U.S.’s top grocery store chains, Kroger and Albertsons, have announced their intention to merge, according to numerous news outlets.


Rival grocers Kroger and Albertsons on Friday announced plans to team up.

The companies said Kroger agreed to buy Albertsons for $34.10 a share in a deal valued at $24.6 billion. Albertsons shares had closed Thursday at $28.63 after surging on reports that a deal was imminent.

Kroger is the second-largest grocer by market share in the United States, behind Walmart, and Albertsons is fourth, after Costco. Together, Kroger and Albertsons would be a closer second to Walmart.

Both companies’ boards unanimously approved the agreement, which will also need regulatory approval.

It can’t be exaggerated how massive this new, “Frankentein” monster of a food chain would be-and how it would affect how many Americans shop across the country. Here are the stats for both companies, via the AP:

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter. Alberstons, based in Boise, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s. Together the companies employ around 710,000 people.

The deal will likely get heavy scrutiny from U.S. antitrust regulators, especially at a time of high food price inflation. The Justice Department and the Federal Trade Commission were already in the process of updating merger guidelines to better detect and prevent anticompetitive deals.

The AP piece shared more details on the companies’ plans:

Kroger Chairperson and CEO Rodney McMullen, who would retain those titles at the combined company, said the combination could save $1 billion annually in lower administrative costs, more efficient manufacturing and distribution, and shared investments in technology. He said the company would plow those savings back into lower prices, higher wages and improved stores.

“We will take the learnings from each company to bring greater value and a better experience to more customers, more associates, and more communities,” McMullen said Friday in a conference call with investors.

The merger announcement came through a joint press release from the companies Friday.

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