Kroger to purchase Harris Teeter for $2.5 billion

Abha Bhattarai
July 10
The Washington Post

Kroger, one of the country’s largest grocery chains, announced a $2.5 billion deal Tuesday to acquire rival Harris Teeter supermarkets.

The deal, which must be approved by federal regulators, would extend Kroger’s reach along the East Coast, particularly in the Washington area, where Harris Teeter has 34 stores.

Kroger, which is headquartered in Cincinnati, said it does not plan to close any Harris Teeter locations and that its stores will keep their name.

“This merger extends Kroger’s footprint into new, growing markets,” J. Michael Schlotman, Kroger’s senior vice president and chief financial officer, said in a conference with investors. “We expect the addition of Harris Teeter will accelerate our growth into attractive new markets and enhance both our top and bottom line.”

Kroger will pay $49.38 per share for Harris Teeter stock, a 1.77 percent premium over Monday’s closing price. The company will also assume $100 million of Harris Teeter’s outstanding debt.

Harris Teeter will keep its headquarters in Matthews, N.C., and continue to operate its stores as a subsidiary of Kroger, according to a company statement.

“It’s very important for us to be locally relevant,” said Lynn Marmer, vice president of corporate affairs at Kroger. “We don’t operate one-size-fits-all stores. They’re customized to the markets where they’re located and they oftentimes have a name that’s different from the Kroger name.”

Kroger operates 2,419 supermarkets, including Fred Meyer, Fry’s and Food 4 Less, as well as jewelry stores and fuel stations. Last year, the company had $96.8 billion in sales, making it the largest supermarket chain the United States, behind Wal-Mart.

Harris Teeter, which had $4.54 billion in sales last year, has 212 stores.