Grocers Kroger and Albertsons are selling more than 400 stores and other assets to C&S Wholesale Grocers for approximately $1.9 billion in an effort to complete their merger.
The deal includes the sale of 413 stores with the QFC, Mariano and Carrs brands. Kroger will also divest private label brands Debbie Lilly Design, Primo Taglio, Open Nature, Ready Meals and Waterfront Bistro. In addition, C&S will have eight distribution centers and two offices.
All gas stations and pharmacies associated with the released stores will remain with the stores and continue to operate.
Hooks and Albertsons agreed to merge in October. Kroger, based in Cincinnati, Ohio, made a $20 billion bid for Albertsons. Kroger will assume $4.7 billion in Albertsons debt. The deal is set to close early next year.
Before the deal with C&S closes, Kroger, subject to securing Federal Trade Commission and other government approvals, may require C&S to purchase up to 237 additional stores in certain jurisdictions. If more stores are added to the deal, C&S will pay Kroger a yet-to-be-determined financial amount.
Founded in 1918, C&S is a leading supplier of independent grocery stores, serving more than 7,500 independent supermarkets, retail chain stores and military bases. Grand Union currently operates grocery stores and Piggly Wiggly franchise and corporate-owned stores in the Midwest and Carolinas.
C&S has prior experience in merger-related disputes and has previously successfully mediated unionized employees and their associated collective bargaining agreements.
“Importantly in our agreement, C&S is committed to honoring all collective bargaining agreements, which include industry-leading benefits, retention of leading partners and additional investment in growth,” Kroger Chairman and CEO Rodney McMullen said in a statement on Friday.
Shares of Kroger Co. were down slightly in morning trading, while Albertsons Co. was up more than 2 percent.
