Kroger, Albertsons Unveil Stores They’d Sell Ahead of $25B Merger

The largest grocery store chain in the U.S. wants to acquire the second largest in what would be the most sweeping supermarket acquisition in American history. They just need to shed nearly 600 stores before getting antitrust approval to do so. 

Cincinnati-based Kroger and Boise, Idaho-based Albertsons plan to sell 579 brick-and-mortar locations to C&S Wholesale Grocers for an undisclosed sum. Kroger would then absorb Albertsons in a $24.6 billion deal, according to the Business Journals. Kroger’s Albertsons purchase depends on the C&S sale. 

The pair plans to sell stores across 18 states and Washington, D.C., including 63 in California, according to a list Kroger released Tuesday. Kroger will also sell distribution facilities in Washington state, Arizona, Colorado and Utah, as well as a dairy plant in Denver, to C&S in the deal. 

The vast majority of the California locations, under sub-brands Vons and Pavilions, are spread throughout Greater Los Angeles, where Kroger and Albertsons have a large market overlap. 

If the deal goes through, C&S plans to keep all employees’ current pay, health plans and collective bargaining arrangements, per the Business Journals, citing a letter written by Kroger CEO Rodney McMullen. 

“We have committed that no front-line workers will lose their jobs and no stores will close as a result of the merger, which is true for stores that remain with Kroger and those that are transferred to C&S,” McMullen said in the letter.

Although Kroger and Albertsons agreed to the sale back in 2022, the companies have faced opposition from federal regulators who say such a merger would essentially constitute a monopoly. Kroger operates about 2,700 stores, while Albertsons operates about 2,270 across a combined 48 states.

The Federal Trade Commission, along with attorneys general in eight states and D.C., in February filed a lawsuit in a federal court in Oregon to block the acquisition, arguing that the deal would “eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans.”

A representative for Albertsons declined to comment on the FTC lawsuit. 

“The comprehensive divestiture plan with C&S is critical to bringing the meaningful and measurable benefits of our merger with Albertsons to associates, customers and communities across America,” a Kroger spokesperson told Commercial Observer via email. “We are committed to working closely with C&S to ensure a seamless transition of ownership for all divested stores and supporting operational infrastructure.”

Nick Trombola can be reached at NTrombola@commercialobserver.com.