Cincinnati and Milwaukee — The Kroger Co. and Roundy’s, Inc. have formed a definitive merger agreement under which Kroger will purchase all outstanding shares of Roundy’s. The Midwest grocer will expand Kroger’s footprint with a complementary base of 151 stores and 101 pharmacies in new markets.
Both company boards have approved the merger. The transaction is expected to close before the end of the 2015 calendar year.
“We are delighted to welcome Roundy’s to the Kroger family,” says Rodney McMullen, Kroger’s chairman and chief executive officer. “We are excited about Roundy’s future growth.”
“Mergers for Kroger always involve both parties bringing something to the table,” continues McMullen. “We admire what Bob Mariano has done with the Mariano’s banner in Chicago, where he has created an urban format that is resonating with customers and we expect to apply Roundy’s experience to our stores in urban areas around the country. Kroger’s scale and strong financial position will enable Roundy’s to reinvest in its home state of Wisconsin while continuing to grow in Chicago.”
Says Robert A. Mariano, chairman of the board, president and CEO of Roundy’s, Inc.: “We are excited about becoming part of The Kroger Co. Kroger’s scale, knowledge and experience allows us to accelerate the strategic initiatives we have invested in and makes us a more formidable competitor in the marketplace.”
Roundy’s brings to Kroger an expanded footprint with a complementary base of 151 stores and 101 pharmacies in new geographies including Milwaukee, Madison and Northern Wisconsin, which are served under the Pick ‘n Save, Copps and Metro Market banners. The merger also expands Kroger’s presence with an innovative store format in the Chicagoland area, where Roundy’s operates 34 stores under the Mariano’s banner. Roundy’s also operates two distribution centers in Oconomowoc and Mazomanie, Wis., and a commissary in Kenosha, Wis.
Together, Kroger and Roundy’s will operate 2,774 supermarkets and employ over 422,000 associates across 35 states and the District of Columbia. Following closing, Roundy’s will continue to operate its stores as a subsidiary of The Kroger Co. and will continue to be led by key members of Roundy’s senior management team. There are no plans to close stores, and associates will have employment opportunities with both companies. Roundy’s headquarters will remain in Milwaukee, Wis.
BofA Merrill Lynch and Sagent Advisors, LLC are acting as financial advisors to Kroger and Weil, Gotshal & Manges LLP is acting as legal advisor to Kroger. J.P. Morgan Securities LLC is acting as exclusive financial advisor to Roundy’s. Kirkland & Ellis LLP is acting as legal advisor to Roundy’s.
Founded in Milwaukee in 1872, Roundy’s operates 151 retail grocery stores and 101 pharmacies in Wisconsin and Illinois.
SOURCE: The Kroger Co.