Kroger, Albertsons Agree to Divest More Stores

579 Stores to Be Sold to C&S to Make $24.6 Billion Merger More Appealing to Antitrust Authorities
Kroger store
(Ed Pevos/Ann Arbor News via AP, File)

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Kroger Co. and Albertsons Cos. agreed to divest more stores to C&S Wholesale Grocers, seeking to make their planned $24.6 billion merger more appealing to antitrust authorities.

The supermarket chains had agreed in September to sell 413 locations to C&S and have boosted the figure to 579, they said April 22.

The Federal Trade Commission, eight states and Washington, D.C., sued in February to block the proposed deal, arguing the tie-up would lead to higher prices for groceries and lower wages for workers.

The expanded divestiture plan “addresses concerns raised by regulators, and will further ensure that C&S can successfully operate the divested stores as they are operated today,” Kroger CEO Rodney McMullen said in the companies’ statement.

The companies continue to promise that no stores will close as a result of the merger and all front-line workers will remain employed, McMullen said.

Under the new proposal, Kroger and Albertsons will sell 101 Arizona stores to C&S, up from 24 under the prior plan. In Washington state, they’ll sell 124, up from 104. In Colorado, it’s now 91 stores, up from 52. In Illinois, the number of stores being sold rises to 35 from 14. In Oregon, it rises to 62 from 49. California sees a decrease in planned sales, to 63 from 66.

The merger would be the biggest U.S. grocery deal in history if it goes through, according to the FTC and data compiled by Bloomberg. Kroger ranks No. 38 on the Transport Topics Top 100 list of the largest private carriers in North America, while Albertsons is No. 40. Kroger, Albertsons and C&S rank No. 4, 5 and 9, respectively, on the TT grocery list.

Kroger shares were unchanged in premarket trading April 22. Albertsons rose 0.7%.

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