Kroger, Albertsons to sell 166 more stores for a combined $25 billion, but deal pending

Kroger and Albertsons said Monday they are increasing the number of grocery stores they sell to C&S wholesale grocers to address concerns from federal regulators about its impact. Proposed $25 billion merger About the competition.

Another 166 Kroger and Albertsons The store will be sold to C&S as part of an updated divestment agreement between the three companies. The initial divestiture plan included the sale of 413 stores, 8 distribution centers, 2 offices and 5 private label brands.

Under the new deal, C&S will pay about $2.9 billion in cash for the stores, an increase from the $1.9 billion it paid under the original separation plan. The acquisition will give C&S 579 stores and access to Albertsons Signature and O Organics own brands.

Kroger said: “We have reached an agreement with C&S on an updated divestiture plan that maintains Kroger’s commitment to customers, employees and the community, addresses concerns raised by regulators and will further ensure that C&S can successfully operate the divested stores. ” CEO Rodney McMullen said in a release.

The Kroger-Albertson Merger: Good or Bad for Shoppers?

“Importantly, the updated divestiture plan continues to ensure that the merger will not result in any store closings, that all frontline employees will remain employed, that all existing collective bargaining agreements will continue and that employees will continue to have access to industry-leading health care and pension benefits and bargains,” McMullen added. did

C&S Wholesale Grocers CEO Eric Wynn said the company believes this expanded divestiture program will provide stores, support resources and specialized operators to ensure these stores continue to successfully serve the community.

Winn added that C&S “looks forward to welcoming legendary brands, premium private brands and a team of experienced retail associates to the C&S family.

Kroger-Albertson merger in jeopardy

Kroger first announced plans to acquire Albertsons in October 2022 and announced its initial divestiture package in September 2023.

this Federal Trade Commission (FTC) Eight states filed a lawsuit in February 2024 to block the proposed merger, saying the deal would weaken competition in the grocery store market by raising prices for consumers, closing stores and causing job losses.

Some Democrats in Congress have called on the FTC to block the Albertsons-Kroger merger

A District Court Oregon will hold a hearing in August on the FTC’s request for a preliminary injunction to block the deal.

Tom Geiger, UFCW 3000 spokesman representing Kroger and Albertsons unionized employees Representatives from Washington, Oregon and Idaho said members were concerned that C&S could sell store real estate if it lacked the necessary IT infrastructure, customer loyalty and manufacturing capabilities.

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Reuters reported that legal advisers familiar with the deal and split plan said Kroger and Albertsons are trying to give C&S a business it can operate efficiently by adding distribution capabilities to build a dense network of local stores to support its business.

Reuters contributed to this report.