Yahoo Finance Kroger (KR), Albertsons Revamp Divestiture Package Amid Concerns
In a bid to address regulatory concerns surrounding their proposed merger, The Kroger Co. KR and Albertsons Companies Inc. ACI have unveiled an amended divestiture package in collaboration with C&S Wholesale Grocers, LLC (“C&S”). This strategic move aims to fortify competitiveness and ensure a smooth transition post-merger.
Responding to feedback from federal and state antitrust regulators, the revised divestiture package boasts a broader spectrum of assets, effectively addressing concerns raised during the initial agreement. With a steadfast commitment to customers, employees and communities, the updated package is poised to bolster the companies' stance in regulatory proceedings.
Rodney McMullen, the chairman and CEO of Kroger, underscored the significance of the updated plan in safeguarding jobs, benefits and community ties. The agreement reaffirms the pledge to prevent store closures, retain jobs and uphold existing agreements, thereby ensuring stability for frontline associates.
The proposed merger between Kroger and Albertsons is poised to deliver palpable benefits to consumers, employees and communities nationwide. By broadening access to fresh, affordable food and presenting a compelling alternative to non-union retailers, the merger endeavors to create value for all stakeholders.
Image Source: Zacks Investment Research
Eric Winn, the CEO of C&S, expressed confidence in the expanded divestiture package, highlighting the opportunity to preserve the legacy of service and quality within the communities served by the divested stores. The acquisition aligns seamlessly with C&S' long-term growth strategy, reinforcing its commitment to customer satisfaction.
The revised divestiture package includes the sale of 579 stores to C&S, encompassing renowned banners such as QFC, Mariano's, Carrs and Haggen. Additionally, it involves licensing arrangements for Albertsons and Safeway banners in specific states, ensuring a smooth transition post-merger.
Subject to customary closing conditions, including regulatory clearance, C&S will extend an approximate $2.9 billion all-cash consideration to Kroger. The merger with Albertsons Cos. is poised to generate significant benefits, including lower prices, increased local product offerings and substantial investments in wages and benefits.
Wrapping Up
The revamped divestiture package epitomizes KR and ACI's unwavering commitment to addressing regulatory concerns while advancing their strategic imperatives. As the companies propel forward with the merger, they remain steadfast in their dedication to delivering value to customers, employees and communities alike.
Shares of Kroger, which carries a Zacks Rank #2 (Buy), have increased 30.5% in the past six months compared with the industry’s rise of 15.2%.
2 More Stocks Looking Red Hot
Here, we have highlighted other top-ranked stocks, namely Sprouts Farmers Market SFM and Grocery Outlet GO.
Sprouts Farmers is engaged in the retailing of fresh, natural and organic food products. It currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 10%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 6.7% and nearly 3.9%, respectively, from the year-ago reported numbers.
Grocery Outlet, the extreme value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 9.6% and 10.3%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 17%, on average.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Kroger Co. (KR) : Free Stock Analysis Report
Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report
