C&S Wholesale to Acquire 400+ Kroger, Albertsons Locations
Kroger and Albertsons are selling more than 400 locations in 17 states and Washington, D.C., to C&S Wholesale Grocers in a deal that also includes eight distribution centers, two offices and five private label brands.
The divestiture of these assets is in connection with the proposed Kroger and Albertsons merger announced nearly a year ago and is valued at approximately $1.9 billion.
According to Kroger and Albertsons, the move marks a key next step toward the completion of the merger by extending a well-capitalized competitor into new geographies. The plan ensures no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive health care and pension benefits alongside bargained-for wages.
Rodney McMullen, chairman and CEO of The Kroger Co., said following the merger announcement last year, the company embarked on an effort to identify a buyer that would ensure the divested stores and their associates will continue serving their communities
"C&S is led by an experienced management team with an extensive background in food retail and distribution and has the financial strength to continue investing in associates and the business for the long run,” he said. “Importantly in our agreement, C&S commits to honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth."
The divestiture transaction includes 413 stores, along with the QFC, Mariano's and Carrs brand names. Stores currently under these banners that are retained by Kroger will be re-bannered into one of the retained Kroger or Albertsons Cos. banners following the close of the transaction.
In the four states — Arizona, California, Colorado and Wyoming — where C&S will have the license to the Albertsons banner, Kroger will re-banner the retained stores following the close of the merger with Albertsons Cos. Kroger will maintain the Albertsons banner in the remaining states. In addition, Kroger will divest the Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro private label brands.
The number of stores contained in the divestiture plan by geography is as follows:
- WA: 104 Albertsons Cos. and Kroger stores
- CA: 66 Albertsons Cos. and Kroger stores
- CO: 52 Albertsons Cos. stores
- OR: 49 Albertsons Cos. and Kroger stores
- TX/LA: 28 Albertsons Cos. stores
- AZ: 24 Albertsons Cos. stores
- NV: 15 Albertsons Cos. stores
- IL: 14 Kroger stores
- AK: 14 Albertsons Cos. stores
- ID: 13 Albertsons Cos. stores
- NM: 12 Albertsons Cos. stores
- MT/UT/WY: 12 Albertsons Cos. stores
- DC/MD/VA: 10 Harris Teeter stores
The above stores (regardless of banner) will be divested by Kroger following the closing of the merger with Albertsons Cos. Prior to the closing, Kroger may, in connection with securing Federal Trade Commission and other governmental clearance, require C&S to purchase up to an additional 237 stores in certain geographies. If additional stores are added to the transaction, C&S will pay Kroger additional cash consideration based upon an agreed upon formula.
"We look forward to welcoming thousands of new associates to the C&S family and providing them the opportunity to build long and successful careers," said Eric Winn, chief operating officer and designated chief executive officer (effective October 2) of C&S Wholesale Grocers. "As a leader in the grocery industry, we have a strong heritage of value and customer service that is enabled by a deep commitment to our consumers, employees and communities. Today's announcement is another exciting opportunity for C&S to further expand into the retail market, which is an important component of our growth and future success."
Kroger officials said the merger remains on track to close in early 2024, subject to the receipt of required regulatory clearance and other customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.