Ryan English, MBA, CFA, CPA, CFP®, recently spoke with Steve Watkins of the Cincinnati Business Courier about the ongoing details of the Kroger Co. and Albertsons Cos. merger. Below is an excerpt from the article:
Kroger Co. and Albertsons Cos. have narrowed down their planned number of stores they’ll divest as part of planned merger.
Downtown Cincinnati-based Kroger (NYSE: KR), the nation’s largest operator of traditional supermarkets, and Boise, Idaho-based Albertsons, the second-largest to Kroger, plan to sell between 250 and 300 stores as part of the planned $24.6 billion deal for Kroger to acquire Albertsons, according to a recent Reuters report. That's narrower than the range of 100 to 375 stores the companies initially planned to divest...
Ryan English, investment manager and shareholder at Kenwood-based investment advisory firm Foster & Motley, told me the number of stores the companies are targeting to sell makes sense.
“It is inevitable that Kroger and Albertsons will have to divest stores to gain FTC approval of the merger transaction,” English said. “The question has always been how many stores will it take?"
English said divesting 250 to 300 stores makes sense, but if Kroger signed an agreement to complete the merger even if it had to divest 650 stores, the economics of the deal must still work at that level.
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