Albertsons merger with Kroger could be announced this week

by | Oct 13, 2022 | Business

Kroger could announce a deal to buy rival grocery company Albertsons this week, sources told CNBC’s David Faber.Shares of Albertsons jumped and were briefly halted on Thursday morning after news that two companies are deep in talks.The all-cash acquisition may be announced as soon as Friday morning, sources told Faber.Kroger is the largest supermarket operator in the country with about two dozen banners, including Fred Meyer, Ralphs, King Soopers, Harris Teeter and its namesake brand. It has nearly 2,800 stores in 35 states and about 420,000 employees. The company trails behind Walmart, which is the top grocer in the U.S. by revenue.Albertsons is made up of 20 banners, including Safeway, Acme and Tom Thumb. It has more than 2,200 supermarkets in 34 states and Washington, D.C. Albertsons has 290,000 employees, according to its website.Kroger is the larger of the two companies, with a market cap of about $32 billion. Albertsons’ market cap is about $15 billion.The two companies could not be immediately reached by CNBC for comment. Bloomberg first reported the news of the deal talks earlier Thursday.The talks come as competition in the grocery industry has intensified. About five years ago, Amazon spooked legacy grocers by acquiring Whole Foods. Its stores, which now include Amazon Fresh, still command a small percentage of the overall U.S. grocery market, but sparked a wave of investment.Kroger, for example, struck a deal with British online grocer Ocado to build huge robot-powered fulfillment centers to pick and pack online grocery orders. It has used the new business model to break into new markets, including Florida. It also plans to expand in the Northeast.The pandemic also pushed the industry to better cater to customer preferences, with services such as curbside pickup and home delivery. Yet those investments have also pressured grocers’ profits. Already, the grocery business is known for its thin margins and inflation has driven up the costs of food.This story is developing. Please check back for updates. …

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