Supermarket giant Kroger announced a $1.65B deal to acquire Pennsylvania-based grocery chain Giant Eagle, just 18 months after its $25B megamerger with Albertsons fell apart.

Kroger's acquisition price includes $1.25B in cash considerations and the assumption of roughly $400M in outstanding liabilities. The company's board of directors unanimously approved the deal.

"Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty," Kroger CEO Greg Foran said in a release. "We evaluated the opportunity carefully, and the strategic fit is clear. Giant Eagle expands our reach into attractive adjacent markets."

The Cranberry Township, Pennsylvania-based grocery chain has 197 supermarkets and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana.

The transaction is expected to close in 2027 if it clears regulatory hurdles. To garner that regulatory approval, Kroger and Giant Eagle expect to make "limited Giant Eagle store divestitures."

Regulatory approval for the merger isn't guaranteed, as the grocery chain experienced when its deal to acquire Albertsons fell apart in December 2024.

Kroger and Albertsons, the second- and third-largest grocery chains in the country, behind Walmart, had sought to form a chain of 5,000 stores to compete with Walmart. The Federal Trade Commission and attorneys general from eight states and Washington, D.C., sued to block the merger in February 2024 over antitrust concerns, with a judge ruling in their favor that December.

In the fallout, Albertsons terminated its merger agreement with Kroger and sued the company for breach of contract. Albertsons is after billions of dollars in damages from Kroger, as well as a $600M termination fee Albertsons claims was part of the merger deal.

The lawsuit was ongoing as of last month, according to Progressive Grocer.