Kroger to acquire Giant Eagle for $1.65 billion
Kroger is set to purchase Giant Eagle for $1.65 billion, the company announced Wednesday, July 1.
Kroger will assume control in 2027 of the family-owned retailer, which has 197 supermarkets, 11 standalone pharmacies and does $9 billion in annual sales, pending regulatory clearances. The companies expect to sell or close some Giant Eagle locations, according to a news release from Kroger.
“Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty,” said Greg Foran, Kroger’s chief executive officer. “We evaluated the opportunity carefully, and the strategic fit in clear.”
The sale consists of $1.25 billion in cash considerations and the assumption of about $400 million in outstanding liabilities, Kroger said.
Giant Eagle expects to maintain its headquarters in Cranberry Township under the same leadership and will maintain the myPerks loyalty program, according to CEO and President Bill Artman. The company will retain its name and brands as a division of Kroger.
Foran said purchasing Giant Eagle will expand Kroger’s reach into adjacent markets. Giant Eagle’s established store base, loyalty program, pharmacy and private label portfolio provides a strong foundation to integrate Kroger’s eCommerce solutions, data capabilities and operating discipline.
Kroger expects the agreement to create an adjusted ratio of earnings before interest, taxes, depreciation and amortization of 2.3-2.5x. The company expects to continue its previously announced $2 billion share repurchase program and preserve financial flexibility.
Giant Eagle was founded in 1931 and has locations in Pennsylvania, Ohio, West Virginia, Maryland and Indiana.
The sale was unanimously approved by Kroger’s board of directors and advisers for Kroger and Giant Eagle.
