US supermarket chain Kroger has struck an agreement to acquire privately held food and pharmacy retailer Giant Eagle in a transaction valued at $1.65bn.
Giant Eagle generates around $9bn in annual revenue and runs 197 supermarkets alongside 11 stand-alone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana.
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Under the terms of the agreement, Kroger will pay $1.25bn in cash and take on roughly $400m of Giant Eagle’s existing liabilities.
Giant Eagle CEO Bill Artman said: “Together with Kroger, we will be well-positioned to advance our strategy and deliver better quality and service, better everyday value and a better shopping experience for our customers, while providing greater growth opportunities for our dedicated team members.”
According to Kroger, Giant Eagle’s network of stores, its loyalty scheme, pharmacy operations and private label range give it a base from which to expand.
The company said pairing these assets with its own e-commerce, data and personalisation tools could help drive growth across both physical and online channels.
The two businesses also intend to roll out Kroger’s Zero Hunger | Zero Waste initiative into fresh communities.
Kroger intends to fund the acquisition using cash reserves.
The retailer added that it plans to keep paying dividends, pending board sign-off, press ahead with its existing $2bn share buyback scheme and retain the capacity to fund its strategic priorities.
As part of securing regulatory approval, Kroger and Giant Eagle anticipate a small number of store divestitures will be required.
Kroger’s board has given the deal unanimous backing.
Completion is anticipated in 2027, pending regulatory sign-off and other standard closing requirements.
Kroger CEO Greg Foran added: “Giant Eagle expands our reach into attractive adjacent markets, allowing us to do what we do best: run outstanding stores, deliver fresh foods and convenient meal solutions at affordable prices, and take care of our customers and associates every single day.”
