Lamar/Acme Market Ventnor Plaza shopping center.
The Kroger and Albertsons network of grocery stores Friday announced they have entered into a definitive agreement to merge the two iconic brands that have deep roots in their local communities.
Albertsons is the parent company of Acme Markets, which has a store in the Ventnor Plaza shopping center on Wellington Avenue.
Kroger
The merger will unite around Kroger’s “Purpose to Feed the Human Spirit,” expand customer reach and improve delivery of fresh and affordable food to approximately 85 million households.
Under the terms of the merger agreement, which has been unanimously approved by the board of directors of each company, Kroger will acquire all outstanding shares of Albertsons Companies, Inc. common and preferred stock for an estimated total consideration of $34.10 per share, implying a total enterprise value of approximately $24.6 billion, including the assumption of approximately $4.7 billion of Albertsons’ net debt.
Together, Albertsons and Kroger currently employ more than 710,000 associates and operate a total of 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers.
The combination creates a “premier seamless ecosystem” across 48 states and the District of Columbia, providing customers with a best-in-class shopping experience across both stores and digital channels. Both Kroger and Albertsons are anchored by shared values focused on ensuring associates, customers and communities thrive, a press release announcing the merger states.
Kroger has a long track record of lowering prices, improving the customer experience and investing in its associates and communities. Consistent with prior transactions, Kroger plans to invest in lowering prices for customers and expects to reinvest approximately a half-billion dollars of cost savings from synergies to reduce prices for customers.
An incremental $1.3 billion will also be invested into Albertsons stores to enhance the customer experience. Kroger will also build on its recent investments in associate wages, training and benefits. Kroger has invested an incremental $1.2 billion in associate compensation and benefits since 2018. The combined company expects to invest $1 billion to continue raising associate wages and comprehensive benefits after close.
“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” said Rodney McMullen, Kroger chairman and CEO, who will continue serving as chairman and CEO of the combined company.
Joining with Albertsons will help Kroger expand into areas where they currently do not have stores, McMullen said.
“As a combined entity, we will be better positioned to advance Kroger’s successful go-to-market strategy by providing an incredible seamless shopping experience, expanding Our Brands portfolio, and delivering personalized value and savings. We’ll also be able to further enhance technology and innovation, promote healthier lifestyles, extend our health care and pharmacy network and grow our alternative profit businesses. We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders,” he said.
“This transaction with Kroger provides substantial value to shareholders and exciting opportunities for associates to be part of a combined organization with the ability to better support the lives and health of millions of Americans,” Albertsons CEO Chan Galbato said.
The merger will enable Kroger to provide fresher food faster, enhance product offerings, improve shopper experiences, invest in their employees, and more.
The transaction is expected to close in early 2024.
