Kroger, Albertsons and C&S Wholesale Grocers update divestiture plan

Kroger (KR) and Albertsons (ACI) have amended their definitive agreement with C&S Wholesale Grocers for the sale of assets in connection with their proposed merger. This amended package modifies and builds on the initial divestiture package announced on September 8, 2023. The amended divestiture package responds to concerns raised by federal and state antitrust regulators regarding the original agreement. The enhanced divestiture package includes a modified and expanded store set and additional non-store assets. The companies believe the amended divestiture package will bolster their position in regulatory challenges to the proposed merger. The updated divestiture package increases the total store count by 166 to include 579 stores that will be sold to, and continue operating as they do today by the new owner, C&S. It maintains the sale to C&S of the QFC, Mariano’s and Carrs banner names. Kroger will also sell the Haggen banner to C&S. Stores currently under these banners that are retained by Kroger will be re-bannered into one of the retained Kroger or Albertsons Cos. banners. C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado. The stores will be sold by Kroger to C&S following the closing of the merger with Albertsons Cos. The amended divestiture package also expands the corporate and office infrastructure provided to C&S. All fuel centers and pharmacies associated with the divested stores will remain with the stores and continue to operate. The amended agreement maintains the divestiture of certain private label brands to C&S. The revised agreement also provides C&S with access to the Signature and O Organics private label brands. Subject to fulfillment of customary closing conditions, including the completion of the Kroger-Albertsons merger, C&S will pay Kroger an all-cash consideration of approximately $2.9B. The combined company committed that no stores, distribution centers or manufacturing facilities will close as a result of the merger.