Press "Enter" to search and "ESC" to close.
Inicio » English » Money » Kroger plans to buy Albertsons in a US supermarket mega-merger

Kroger plans to buy Albertsons in a US supermarket mega-merger

Suscríbete a Nuestro Boletín
Recibe por email las noticias más destacadas
Kroger compra Albertsons y crea un gigante de supermercados en EEUU
  • Kroger announced plans to buy Albertsons, creating a grocery giant.
  • The merger of the two largest grocery stores in the country would help them better compete with Walmart, Amazon and other massive retailers.
  • On Friday, Kroger offered more than $20 billion to buy Albertsons Companies Inc.

Two of the nation’s largest grocery stores have agreed to merge in a deal they say would help them better compete with chains like Walmart, Amazon and other major retailers that have gotten into the grocery store business, reported The Associated Press.

On Friday, Kroger offered $20 billion to buy Albertsons Companies Inc., or $34.10 a share. Kroger will also assume $4.7 billion of Albertsons’ debt. Headquartered in Cincinnati, Ohio, Kroger operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter.

Kroger-Albertsons merger would create a US supermarket giant

Photo: Twitter

For its part, Alberstons, based in Boise, Idaho, operates 2,220 stores in 34 states, including brands such as Safeway, Jewel Osco and Shaw’s. Together, the companies employ about 710,000 people.

The deal is likely to come under intense scrutiny from US antitrust regulators, especially in a time of high inflation for food prices. If approved, the deal is expected to close in early 2024.

Will they become Walmart’s biggest competition?

Kroger buys Albertsons and creates a US supermarket giant
Photo: Twitter

Together, the stores would control about 13% of the US grocery market, assuming the sale and closure of about 400 stores for antitrust reasons, according to Ken Goldman, an analyst at JP Morgan. Still, that’s a distant second to Walmart’s 22% stake.

Amazon, which bought Whole Foods in 2017, is also a growing player in the space, with a 3% share. Warehouse store Costco controls 6%. Value chains like Aldi and Dollar General, which have a combined 4% market share, have also been squeezing traditional grocers like Kroger and Albertsons, particularly as red-hot inflation pushes people to cut costs. Filed Under: Kroger buys Albertsons

Some say the Kroger-Albertsons merger could help curb inflation

Kroger buys Albertsons and creates a US supermarket giant
Photo: AP

Goldman said a stronger combined company could potentially help rein in food price inflation as it would have more power to ward off price increases from food producers. Kroger said it would reinvest roughly $500 million in price cuts and spend $1.3 billion on updating Albertsons stores and $1 billion on higher employee wages and better benefits.

Kroger also said the combined stores would provide greater access to fresh food. Together, the stores operate in 48 states and the District of Columbia. But critics questioned a merger at a time of high inflation in food prices. Food prices rose 13% in September compared to a year ago, according to US data released on Thursday. Filed Under: Kroger buys Albertsons.

How will consumers be affected?

million dollar deal
Photo: Shutterstock

“A Kroger-Albertsons deal would squeeze consumers already struggling to buy food, crush workers fighting for fair wages and destroy independent community stores,” said Sarah Miller, executive director of the American Economic Liberties Project, a nonprofit organization that supports greater corporate responsibility and antitrust measures, according to the AP.

It was no secret that Albertsons was thinking of selling the company. The chain announced in February that its board was reviewing options to improve shareholder value, including new business development or a sale. And both Albertsons and Kroger have become big operations partially through acquisitions. Filed Under: Kroger buys Albertsons

Etiquetas: ,
Related post
Regresar al Inicio