Kroger, Albertsons to Sell 166 Additional Stores in $2.9 Billion Divestiture Agreement Ahead of Proposed Merger 

by Hayden Spiess

Cincinnati — Cincinnati-based The Kroger Co. and Boise, Idaho-based Albertsons Cos. Inc. have announced plans to sell an additional 166 grocery stores to C&S Wholesale Grocers in a divestiture package. This marks an amendment to an existing agreement with the buyer, which will now acquire a total 579 stores in a $2.9 billion deal. The original divestiture package was announced in September of last year, in connection with a proposed merger between Kroger and Albertsons. 

In February, the Federal Trade Commission (FTC) sued to block Kroger’s $24.6 billion acquisition of Albertsons (which was originally announced October 2022), citing anticompetition concerns. The FTC alleged in a press release that a merger between the companies would create a “monopoly” as well as “lead to lower quality products and services” and threaten “the ability of employees to secure higher wages, better benefits and improved working conditions.”

The deal would mark the largest supermarket merger in U.S. history, with Kroger and Albertsons operating thousands of stores nationally. Colorado and Washington also filed measures at the state level to block the merger. 

The companies hope to assuage the concerns of federal and state antitrust regulators with the enhanced divestiture package. According to a press release issued by Kroger, the revised deal with C&S Wholesale Grocers will “further enable C&S to operate competitively following the completion of the proposed merger” and “will bolster [Kroger’s and Albertson’s] position in regulatory challenges to the proposed merger, including pending court proceedings.”

The deal with C&S now includes 124 stores in Washington; 63 stores in California; 91 stores in Colorado; 62 stores in Oregon; 30 stores in Texas and Louisiana; 101 stores in Arizona; 16 stores in Nevada; 35 stores in Illinois; 18 stores in Arkansas; 10 stores in Idaho; nine stores in New Mexico; 11 stores in Montana, Utah and Wyoming; and nine stores in Washington, D.C. Maryland, Virginia and Delaware. 

Albertsons-branded stores comprise the majority of the portfolio to be sold, which also includes Kroger stores in Washington, Oregon and Illinois, as well as nine Harris Teeter-branded stores. 

C&S will also acquire ownership of the private label brands Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals, Waterfront Bistro, Signature and O Organics.

Kroger’s portfolio includes stores operating under the regional banners Fred Meyer, Fry’s, Harris Teeter, King Soopers and Quality Food Centers. Albertsons likewise operates stores under other brands including Haggen, Jewel-Osco, Pavilions, Safeway and Vons, in addition to its namesake Albertsons shops.

According to Kroger, the updated deal ensures that no stores will close as a result of the merger.  

— Hayden Spiess

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