Kroger is buying Harris Teeter Supermarkets for $2.4 billion
in a deal announced Tuesday that will increase the reach of the nation's largest grocery store chain to 34 states.
Kroger's acquisition of Harris Teeter Supermarkets' 212 stores is the fourth-largest acquisition of a North American food retailer in the past decade, USA TODAY reported.
Kroger operates more than 2,400 supermarkets and multidepartment stores, employing 343,000 associates nationwide. The company also operates 784 convenience stores and 322 fine jewelry stores.
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According to Bloomberg News, the Kruger takeover of Harris Teeter Supermarkets represents the company's largest acquisition since 1998, when it bought out the Northwest's Fred Meyer food and merchandise store chain for more than $12 billion.
In a Tuesday press release, Kroger described the 212 stores as operating in "high-growth," "attractive," markets across the southeast and mid-Atlantic states, where they service areas that are often regarded as "vacation destinations and university communities."
In fiscal year 2012, Harris Teeter had revenues of approximately $4.5 billion the release stated.
"Harris Teeter is an exceptional company with a great brand, friendly and talented associates, and attractive store formats in vibrant markets run by a first-class management team," David B. Dillon, Kroger's Chairman and Chief Executive Officer said in the release. "This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates. We look forward to bringing together the best of Kroger and Harris Teeter while continuing to operate and grow the Harris Teeter brands."
In addition to Harris Teeter, Kroger already operates under various store names such as Ralphs, Fry's, King Soopers, City Market, Dillons, and Food 4 Less, among others.
In addition to expanding its grocery store reach, Kroger will also likely be enhancing its image with the purchase of Harris Teeter, which USA TODAY reported is perceived among some shoppers to be a more upscale brand than Kroger.
The transaction will be financed by Kroger which will assume Harris Teeter's outstanding debt of approximately $100 million.
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Through the acquisition, Kroger says it expects to achieve a $40 to $50 million annual cost savings during the next three to four years.
Bigger than Home Depot, Target, and CVS, Kroger is No. 2 only to Wal-Mart in the U.S. with regards to retail sales.
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