Kroger and Albertsons confirmed on Friday this week’s reports that 413 stores will be sold to C&S Wholesale Grocers as part of a $1.9 billion deal.
The sale is meant to move the proposed $25 billion merger between Kroger and Albertsons, respective parent companies of King Soopers and Safeway, forward.
The deal with C&S includes 52 Albertsons stores in Colorado.
Before the deal with C&S closes, Kroger may, in connection with securing Federal Trade Commission and other governmental clearance for its merger with Albertsons, require C&S to buy up to an additional 237 stores in certain regions. If more stores are added to the agreement, C&S will pay Kroger an additional as-yet-to-be-determined financial amount.
No stores will shutter, all frontline employees will keep their jobs, existing collective bargaining agreements will be honored and associates will keep their health care, wages and pension benefits, according to Friday’s news release about the deal. The divested stores’ fuel centers and pharmacies will continue operations.
“We embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today,” said Kroger CEO Rodney McMullen in the statement. “C&S achieves all these objectives.”
New Hampshire-based wholesale company C&S will receive financial support from SoftBank Group Corp., a Japanese holding company, according to Reuters.
Kroger and Albertsons will no longer pursue the option of creating a subsidiary called SpinCo, a standalone public company made up of hundreds of Kroger and Albertsons stores, which shareholders would’ve picked up once the merger closed.
The controversial merger proposal between Kroger and Albertsons has received criticism from state and federal government officials over the risk of forming a grocery monopoly, which could hurt employees, consumers and competition within the industry.
Kroger and Albertsons “remain committed to working cooperatively with the regulators and all other interested parties to complete the transaction,” according to the Friday news release.
Eric Winn, who will become CEO of C&S on Oct. 2., said his company looks forward “to welcoming thousands of new associates to the C&S family and providing them the opportunity to build long and successful careers.”
“Today’s announcement is another exciting opportunity for C&S to further expand into the retail market, which is an important component of our growth and future success,” he said in Friday’s statement.
C&S runs Grand Union Supermarkets and Piggly Wiggly Supermarkets – unfamiliar names in the Rocky Mountain West. Those stores operate in the Midwest, South and Northeast.
But almost a century ago, Piggly Wiggly maintained a large presence in the Denver market, with dozens of stores, Groceteria.com reported. Notably, “the original Piggly Wiggly Grimes locations were absorbed into Safeway by 1938.”
With more than one century in business, C&S was founded as a grocery supplier, and serves over 7,500 independent supermarkets, retail chains and military bases.
— The Associated Press contributed to this story.
