Kroger Eyeing Mega-Merger with Albertsons: Report

Kroger (Cincinnati) could soon announce a merger agreement with rival Albertsons (Boise, Idaho), a deal that would bring 5000 stores under the management of one company.

The potential deal was first reported by Bloomberg, which says the combination of the supermarket giants “would be among the largest U.S. retail transactions in years.”

The cash-and-stock deal would value Albertsons at about $25 billion. If the two companies reach an agreement, it may face antitrust scrutiny and require asset sales, the article says.

“This is the type of transaction that really looks good on paper, but the actual practicality of achieving regulatory approval by the FTC could be difficult,” said Bloomberg analyst Jennifer Bartashus. “If you think about the store bases of the two respective entities, there is a lot of overlap in very competitive markets.”

Kroger is the largest grocery company in the U.S. with nearly 2800 stores in 35 states. Beyond its eponymous brand, it operates about two dozen banners including Harris Teeter, Fred Meyer and King Soopers.

Albertsons is the second-largest supermarket operator in the country with more than 2200 markets in 34 states and Washington, D.C. Its 20-plus banners include Safeway, Vons and Acme.

Read more at Bloomberg.