Cincinnati and Boise, Idaho — Kroger Co. and Albertsons Cos. Inc. have agreed to sell 413 stores across 17 states and Washington, D.C., as part of the $24.6 billion merger between the two grocery giants.
The buyer is C&S Wholesale Grocers, a New Hampshire-based grocery supply company overseeing brands including Piggly Wiggly and Grand Union. According to multiple news outlets including USA Today and Crain’s, the sales price is roughly $1.9 billion.
In addition to the 400-plus grocery stores, C&S will also acquire eight distribution centers and two office properties that Kroger or Albertsons operate, as well as five private label brands. No store closures are expected to occur as a result of this selloff.
The brands that will change ownership include Quality Food Centers (QFC), a regional operator in the Pacific Northwest; Mariano’s, which operates 44 stores in Illinois; and Alaska-based Carrs. Kroger owns QFC and Mariano’s, while Albertsons owns Carrs after acquiring the brand from Safeway and changing the name to Carrs-Safeway.
Lastly, under the terms of the agreement, C&S will receive exclusive licensing rights to the Albertsons brand name in four states: Arizona, California, Colorado and Wyoming. In addition, Kroger will divest the following private label brands: Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro.
The merger between Cincinnati-based Kroger and Boise-based Albertsons was announced in October 2022 and is on track to close early next year. The original terms of the deal included Kroger’s assumption of $4.7 billion of Albertsons’ debt.
“Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today. C&S achieves all these objectives,” says Rodney McMullen, chairman and CEO of Kroger.
Company officials also noted that the divestiture plan “marks a key next step toward the completion of the merger by extending a well-capitalized competitor into new geographies.” The merger had originally been challenged in court by a consumer lawsuit stating that the merger effectively violated antitrust law, claims that were ultimately dismissed.
In announcing the divestiture, Kroger also released its earnings report for its fiscal second quarter. The grocer had $33.9 billion in total sales for the period, down slightly from $34.6 billion in the second quarter of 2022.
— Taylor Williams