Key points:
- Kroger to acquire Albertsons in a deal worth $24.6bn
- The deal includes the assumption of approximately $4.7m of Albertsons net debt
- Albertsons shares rose over 11% on Thursday following reports of the deal
Kroger (NYSE: KR) will acquire Albertsons (NYSE: ACI) in a deal worth $24.6 billion, including the assumption of approximately $4.7 billion of Albertsons net debt, the companies confirmed on Friday.
Bloomberg reported the deal on Thursday before its confirmation today and will see Kroger acquire all of the outstanding shares of Albertsons Companies for a total consideration of $34.10 per share. As part of the deal, Albertsons said it will pay a special cash dividend of up to $4 billion to its shareholders.
The companies stated that the cash component of the $34.10 per share deal could be reduced by the per share value of a newly created standalone public company (SpinCo) that Albertsons is prepared to spin off at closing.
Also Read: What Happens to Your Shares During a Takeover?
The $34.10 price represents a premium of approximately 32.8% to the closing price of Albertsons on October 12.
The merger would result in a supermarket powerhouse, combining more than 2,700 Kroger stores across the United States and over 2,200 Albertsons locations.
“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” said Rodney McMullen, Kroger Chairman and Chief Executive Officer, who will continue serving as Chairman and CEO of the combined company.
“Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors. As a combined entity, we will be better positioned to advance Kroger's successful go-to-market strategy,” he added.
Albertsons shares closed Thursday's session up 11.5%. However, they are down almost 3% premarket.
The deal is expected to close in early 2024.
