Kroger and Albertsons Announce Store Divestitures Amid Deal Review
CINCINNATI, OH & BOISE, ID - After Kroger and Albertsons entered a $24.6 billion merger deal, concerns from government entities began to surface regarding competition in the retail sector. Now, the grocers have announced they will sell between 250–300 stores in hopes of alleviating United States antitrust concerns.
“We are still early in the process of working with regulators to develop a thoughtful plan for store divestitures necessary to complete the merger with Albertsons Cos. Importantly, we will not close any stores, distribution centers, or manufacturing facilities as a result of this merger," said a Kroger spokesperson in a statment. "We will work with regulators to ensure that any divested stores are sold to qualified operators with appropriate management experience, a sound business plan, strong balance sheet and the financial stability to continue to succeed and serve their communities.”
These divestitures come as the Federal Trade Commission (FTC) received pressure from some U.S. lawmakers and consumer advocacy groups to block the merger, according to a report from Reuters. This is due to worries that the merger could lead to grocery price increases on top of already rising inflation.
In total, the stores that Albertsons and Kroger could be selling may be worth over $1 billion, a source close to the matter disclosed to Reuters. They are located across all of the regions that the two retailers operate, including, the Pacific Northwest; Southern California; Phoenix, Arizona; and Chicago, Illinois.
Kroger and Albertsons operate a total of 4,996 locations. Now, the companies are looking for potential buyers for the divested stores and discussing their plans with the FTC. Previously, they said they may divest between 100–375 stores by placing them in a new company that Albertsons shareholders would own. If they cannot find a buyer, they may resort back to this plan.
One prospective buyer, according to the source, includes Ahold Delhaize, which operates Stop & Shop, Giant, Food Lion, and Hannaford banners in the U.S.
As more information on this potential divestiture becomes available, AndNowUKnow will report the latest.