Kroger agreed to acquire family-owned grocery and pharmacy chain Giant Eagle for $1.65 billion on Wednesday, expanding its store footprint into markets across the mid-Atlantic and Midwest.
The deal, which includes $1.25 billion in cash and $400 million in assumed liabilities, is expected to close in 2027
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Kroger agreed to acquire family-owned grocery and pharmacy chain Giant Eagle for $1.65 billion on Wednesday, expanding its store footprint into markets across the mid-Atlantic and Midwest.
The purchase price consists of $1.25 billion in cash and the assumption of approximately $400 million in Giant Eagle's outstanding liabilities, the company said. Kroger's board has unanimously approved the transaction, which is expected to close in 2027, pending regulatory clearance.
The Pittsburgh-based chain has a footprint of 197 supermarkets and 11 standalone pharmacies, with locations in northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana, and its annual sales total roughly $9 billion. Founded in 1931, Giant Eagle is among the largest private corporations in the U.S., according to The Wall Street Journal.
Kroger's own network, by contrast, spans roughly 2,700 supermarkets and multi-department stores along with around 2,200 pharmacies spread across 35 states, according to Reuters.
"Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty," Kroger CEO Greg Foran said in a statement. "Giant Eagle expands our reach into attractive adjacent markets."
Giant Eagle CEO Bill Artman said in a statement that the deal would provide "greater growth opportunities" for the company's employees and deliver improved value and service to customers.
Kroger said it expects the deal to add to adjusted earnings per diluted share in the second full year after closing, excluding transaction and integration costs. The company plans to finance the transaction with cash and said it expects to maintain its net total debt to adjusted EBITDA ratio target range of 2.3 to 2.5 times following the close. Kroger also said it intends to maintain its dividend and continue its previously announced $2 billion share repurchase program.
The two companies said they expect to make limited store divestitures to satisfy regulatory requirements. Kroger stock was down about 2% in premarket trading on Wednesday.
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