Kroger To Acquire Rival Grocer Albertsons For $24.6 Billion

Kroger To Acquire Rival Grocer Albertsons For $24.6 Billion

Kroger To Acquire Rival Grocery Company Albertsons For $24.6 Billion
Kroger To Acquire Rival Grocery Company Albertsons For $24.6 Billion
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Retail Bum

Retail Bum

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Kroger is planning to buy smaller rival Albertsons in a $24.6 billion deal that would see the formation of a grocery giant posing considerable competition to Walmart.

The company will pay $34.10 per share, which will mark a 33% premium on Albertsons’ closing price on Wednesday, the day before the deal became public knowledge.

The deal is expected to add 2,200 Albertsons stores to Kroger’s existing portfolio of 2,700 locations. As a result, it would make Kroger the largest grocer in the U.S., ahead of Walmart, which operates 4,735 U.S. stores.

The acquisition talks come at a time when consumers are spending significantly more on buying grocery products due to sky-high inflation rates. This trend has further raised the competition among grocery giants such as Walmart and Krogers to offer the lowest possible rates.

If the deal goes through, Kroger will gain the upper hand when negotiating rates with suppliers and retail brands with a combined portfolio of approximately 34,000 private-label products across premium, natural, organic, and opening price point brands. The company expects the higher negotiation power to yield nearly $500 billion in cost savings for shoppers.

However, it is worth noting that the deal is likely to run into significant regulatory hurdles as some critics see it as stifling competition in the market, which will likely drive up prices for U.S. shoppers, Reuters reported.

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