Kroger has agreed to acquire family-owned United States regional supermarket chain Giant Eagle for US$1.65 billion (A$2.4 billion) as it responds to intensifying competition from other retailers.
The U.S.' largest supermarket operator said the consideration was $1.25 billion in cash and the assumption of about $400 million in outstanding liabilities.
The acquisition will add Giant Eagle's network of 197 supermarkets and 11 standalone pharmacies to Kroger's 2,700 supermarkets in 35 states.
“Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty,” Kroger Chief Executive Officer Greg Foran said in a news release.
“We evaluated the opportunity carefully, and the strategic fit is clear. Giant Eagle expands our reach into attractive adjacent markets, allowing us to do what we do best: Run outstanding stores, deliver fresh foods and convenient meal solutions at affordable prices, and take care of our customers and associates every single day.”
This is the first major acquisition under New Zealand-born Foran, who joined as Chief Executive Officer in February after a career including roles at Woolworths, Walmart and Air New Zealand.
Also, the first takeover since Kroger's proposed $25 billion merger with Albertsons collapsed in late 2024 and is aimed at strengthening Kroger’s position against intensifying competition from Walmart, Amazon, Costco and discount retailers.
“Today’s announcement marks an exciting next chapter for our Team Members, customers, vendors and community partners,” said Bill Artman, Chief Executive Officer at Giant Eagle.
“Together with Kroger, we will be well-positioned to advance our strategy and deliver better quality and service, better everyday value, and a better shopping experience for our customers, while providing greater growth opportunities for our dedicated Team Members.”
The deal has been unanimously approved by Kroger's board and is expected to close in 2027, subject to regulatory approval and customary closing conditions.
Kroger shares (NYSE: KR) closed 71 cents (1.28%) higher at $56.24 on Wednesday, capitalising the company at $34.46 billion.
