Kroger has announced plans to acquire regional grocery and pharmacy retailer Giant Eagle in a deal totaling $1.65 billion.
Giant Eagle, a privately owned company, currently operates 197 supermarkets and 11 standalone pharmacies spread across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana. Kroger, meanwhile, runs thousands of grocery locations nationwide under a variety of brand names, including Ralphs, King Soopers, Smith’s and Fred Meyer.
According to both companies, the deal is structured as $1.25 billion in cash along with the assumption of roughly $400 million in existing liabilities, details that were announced Wednesday.
Kroger CEO Greg Foran praised the acquisition in a prepared statement, saying, “Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty. We evaluated the opportunity carefully, and the strategic fit is clear.”
Foran, who previously worked as an executive at Walmart, was appointed to lead Kroger in February. He is widely regarded as a tech-focused and detail-driven leader.
Both companies acknowledged that some Giant Eagle store locations may need to be sold off before regulators give the green light for the merger to proceed.
The deal is expected to be completed sometime next year. In early trading, Kroger’s stock slipped nearly 3% ahead of the market’s opening bell.
