)
The Kroger Co. and Albertsons Cos. are selling 413 stores for $1.9B to C&S Wholesale Grocers, according to a filing by the supermarket chains with the Securities and Exchange Commission. C&S, which operates Grand Union and Piggly Wiggly stores, will pay cash.
The deal includes stores in 17 states and Washington, D.C., plus eight distribution centers, two offices and five private label brands. The move is an effort to help win regulatory approval of Kroger and Albertsons' $24.6B merger plan, which was announced last October, and which is being examined by the Federal Trade Commission.
“This comprehensive divestiture plan marks a key next step toward the completion of the merger by extending a well-capitalized competitor into new geographies,” Kroger and Albertsons said in the filings. “The divestiture 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.”
With this sale to SoftBank-backed C&S, the combined company would have more than 4,500 stores.
The merger was proposed in October 2022 and has received a fair amount of criticism, including from the United Food and Commercial Workers union, which said when the deal was announced that it “will oppose any merger that threatens the jobs of America’s essential workers, union and non-union, and undermines our communities.”
In November, four Democratic members of Congress sent a letter asking the FTC to evaluate the Kroger-Albertsons merger. The deal would “create competition-stifling concentration in markets across the country, hurting consumers, workers and small businesses,” the lawmakers said.
In February, the American Antitrust Institute also sent a letter to the FTC asking it to challenge the merger, asserting it would tighten the supermarket oligopoly, as well as give Kroger stronger monopsony power — that is, overwhelming leverage in dealing with independent suppliers.
The grocery chains argue that the combined entity would be able to compete better with even larger grocers, namely Walmart and Target Corp.
)
)
)
)
)
)
)
)
)
)
)
)