Most Active Stories
- Why Doesn't The Sunshine State Use More Solar Energy?
- Free Rides In 95 Express Lanes Coming To An End For Hybrid Drivers
- How Panama Cut Poor Kids Out Of A Florida Millionaire's Will
- Despite Pioneering Integration, Jumbo's Did Not Survive
- Sholom & Mohamed: Brothers In Spite Of Israeli-Palestinian Conflict
Tue July 9, 2013
Kroger Buys Harris Teeter In $2.5 Billion Grocery Deal
Originally published on Tue July 9, 2013 6:30 pm
In a merger of grocery chains, Kroger Co. is buying Harris Teeter Supermarkets Inc., the companies announced Tuesday. The move expands the reach of Kroger, already the nation's largest grocery chain, into the Mid-Atlantic region. The buyout values Harris Teeter at $49.38 per share, a premium of more than 33 percent over its share price earlier this year.
The $2.5 billion deal is one of the largest in the grocery sector in recent years. Kroger is taking on debt to finance the transaction, in addition to assuming around $100 million in debt from Harris Teeter, based in Matthews, N.C. Harris Teeter says its revenues for 2012 totaled around $4.5 billion.
The combined company will operate more than 2,600 stores in 34 states and Washington, D.C. There are currently no plans to close any stores, the two companies said in a joint statement issued today. Their integration plan calls for Harris Teeter to operate its existing 212 stores as a subsidiary of Kroger, with each company maintaining its own headquarters. Kroger is based in Cincinnati.
"Overall, the food and beverage industry is growing as the U.S. economy continues its slow recovery," NPR's Chris Arnold reports for our Newscast unit. "The industry gained 59,000 jobs over the past year."
The merger will bring Kroger new access to markets developed by Harris Teeter, which has specialized in "high-growth markets, vacation destinations and university communities" in the Southeast, the companies say.
"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," Kroger CEO and chairman David B. Dillon says. "They share our customer-centric approach to everything we do — from store format and merchandising to innovative loyalty programs."
A potential buyout of Harris Teeter had been discussed since the beginning of this year, when its market capitalization stood at $2.1 billion. As Bloomberg reported in February, Harris Teeter has seen its sales grow in each of the past 10 years. At the time, a target share price of $55 a share was seen as a possibility.