Supermarkets Kroger, Albertsons Could Combine
Two of the country’s biggest supermarket chains, Albertsons and Kroger, are reportedly in talks to merge in a deal that could have a potential market value of about $50 billion.
Negotiations could conclude this week and result in an agreement, Bloomberg reported on Thursday (Oct. 13) citing unnamed sources with insider information.
If a deal is reached, it would be the largest grocery store agreement since 2006 and the biggest retail transaction in a number of years, per Bloomberg data.
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Headquartered in Boise, Idaho, Albertsons has 2,250 stores and 270,000 employees, making it the fourth-largest supermarket with a 5.7% market share, per Numerator data. Kroger is headquartered in Cincinnati, Ohio, has 2,721 retail locations in 35 states and ranks second with a 9.9% market share.
Any possible transaction agreement between the two supermarkets could face scrutiny from antitrust regulators and everything is preliminary, including structure and price, sources told Bloomberg.
PYMNTS reached out to Albertsons and Kroger for comment.
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“This is the type of transaction that really looks good on paper, but the actual practicality of achieving regulatory approval by the FTC could be difficult,” said Jennifer Bartashus, an analyst at Bloomberg Intelligence. “If you think about the store bases of the two respective entities, there is a lot of overlap in very competitive markets.”
Rupesh Parikh, an analyst at Oppenheimer & Co, told Bloomberg that while both chains have complementary locations on the West Coast, Kroger has a small footprint in the Northeast. A combined entity could deliver benefits like increased purchasing power and shopper rewards, as well as boost resources for technology investments.
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Albertsons owns Acme, Tom Thumb, Shaw, Safeway, Jewel-Osco and Market Street grocery chains and said earlier this year it was looking at ways to create more value for shareholders, Bloomberg reported.