Kroger and Albertson’s announced a $24.6 million merger Friday.
The price includes Kroger acquiring all outstanding shares of Albertson’s Companies, Inc., including the assumption of $4.7 billion of Albertsons Cos. Debt. The agreement has been unanimously approved by the board of directors of each company.
In the announcement, Kroger says it “plans to invest in lowering prices for customers and expects to reinvest approximately half a billion dollars of cost savings … to reduce prices for customers.” It also said $1.3 billion will be invested into Albertson’s stores to “enhance the customer experience.” The combined company also expects to invest $1billion to raise associate wages and benefits.
Together, Albertson’s Cos. and Kroger employ more than 710,000 associates, operate nearly 5,000 stores, 66 distribution centers, 52 manufacturing plants, nearly 4,000 pharmacies and just over 2,000 fuel centers across 48 states and the District of Columbia.
The agreement would also create an Albertson’s Cos. subsidiary, SpinCo, which will operate as a stand-alone public company. The companies will work together to determine which stores, estimated to have 100-375 locations, will comprise SpinCo.
The New York Times wrote that consumer advocates have already raised objections to the possibility of the merger and that is is likely to invite intents scrutiny from regulators.
Kroger Co. operates Smith’s stores. Smith’s and Albertson’s locations can be found throughout the Albuquerque metro.