Kroger to acquire Albertsons for $24.6bn solidifying its position as #2 grocery retailer with 11.8% market share

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Under the merger, Kroger will acquire all of the outstanding shares of Albertsons common and preferred stock for an estimated total consideration of $34.10 per share, implying a total enterprise value of approximately $24.6bn, including the assumption of approximately $4.7bn of Albertsons’ net debt.

We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders,” ​said Kroger chairman and CEO Rodney McMullen who will continue serving as chairman and CEO of the combined company.

Kroger said that it expects the transaction to be accretive to earnings in the first year following the closing and double-digit accretive by year four. 

Next grocery behemoth?

With the acquisition of Albertsons, Kroger will consolidate its position as the second largest food retailer in the US with an 11.8% share (up from 7.1% in 2021) behind Walmart which has a 17.1% share of the grocery market, according to GlobalData.

Kroger operates almost 2,800 stores in 35 states under 28 different banners. Albertsons Companies operates 2,200 stores under 20 banners across 34 states and the District of Columbia and currently runs 22 distribution centers and 19 manufacturing plants.

Together, Albertsons Cos. and Kroger currently employs 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. 

Top five players by share of the total US food and grocery market in 2021: GlobalData

Walmart: 17.1%

Kroger: 7.3%

Costco: 5.7%

Albertsons: 4.5%

Ahold: 4.3%

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