Two grocery giants — Albertsons and Kroger — are set to merge in an approximately $24.6 Billion deal, according to a joint announcement.
This transaction, expected to be completed in 2024, will combine two of the nation’s largest supermarket chains and create one of the nation’s largest private employers. With nearly 5,000 stores and more than $200 billion in sales, the two companies combine to employ 710,000 people – most of whom are unionized, according to CNN.
“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 by providing an incredible seamless shopping experience, expanding Our Brands portfolio, and delivering personalized value and savings. We’ll also be able to further enhance technology and innovation, promote healthier lifestyles, extend our health care and pharmacy network and grow our alternative profit businesses. We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders.”
“This transaction is a testament to the passion and commitment of both Albertsons Cos. and Kroger associates,” McMullen added. “Supporting and investing in our associates is foundational to both of our organizations and will continue to be a critical pillar of our success. Kroger has a track record of successful integrations that combine the strengths of each company while maintaining and enhancing each organizations’ distinctive banners and storied histories. As a combined company, we will build on our similar values to create a culture that embraces diversity, equity and inclusion and fosters a best-in-class associate experience by enabling, supporting and empowering our associates to unlock their full potential. Importantly, the merger secures union jobs and we will continue to work with local unions across America to serve our communities. We look forward to bringing the Albertsons Cos. and Kroger families together to create new and exciting career opportunities for associates.”
This morning’s announcement has already been met with some criticism. As reported by CNN, Sen. Bernie Sanders (D-Vermont) called the deal an “absolute disaster” and urged the Biden administration to reject it. Anti-monopoly organization, American Economic Liberties Project, stated that the merger would harm market competition, small businesses, and particularly consumers.
Currently, the Federal Trade Commission is investigating anticompetitive practices in the grocery industry. Amazon, Kroger, and others were asked to provide information about the causes of empty shelves and rising prices in the United States last year.