Albertsons & Kroger Merger Brings Together 2,000-Plus Gas Stations

CINCINNATI and BOISE, Idaho — Albertsons Cos. Inc. and The Kroger Co. entered into a definitive merger agreement, bringing together two complementary organizations to establish a national footprint.

The boards of directors for both companies unanimously agreed to terms of the agreement, through which Kroger will acquire all outstanding shares of Albertsons for an estimated total consideration of $34.10, or a total enterprise value of approximately $24.6 billion. This includes the assumption of approximately $4.7 billion of Albertsons net debt.

Post-merger, the combined companies will have 2,015 gas stations, in addition to 4,996 stores, 66 distribution centers, 52 manufacturing plants and 3,972 pharmacies, which will employ more than 710,000 associates in total. According to the companies, the combination creates a seamless ecosystem across 48 states and Washington, D.C.

Cincinnati-based Kroger reported it plans to invest in lowering prices for customers and expects to reinvest approximately $500 million of cost savings from synergies to reduce prices for customers. An incremental $1.3 billion will also be invested into Albertsons Cos. stores to enhance the customer experience.

Kroger will also build on its recent investments in associate wages, training and benefits.

"We have been on a transformational journey to evolve Albertsons Cos. into a modern and efficient omnichannel food and drug retailer focused on building deep and lasting relationships with our customers and communities. I am proud of what our 290,000 associates have accomplished, delivering top-tier performance while furthering our purpose to bring people together around the joys of food and to inspire well-being," said Vivek Sankaran, CEO of Boise-based Albertsons Cos.

"At Albertsons Cos., we are guided by an ambition to create customers for life. Together with Kroger, our combined iconic banners will be able to provide customers with even more value and greater access to fresh food and essential pharmacy services," Sankaran continued. "Given the similarities in the culture and values at Kroger and Albertsons Cos., I am confident that the combination will also have a positive impact on our associates and the communities we are proud to serve. We look forward to working together with Kroger to capture the compelling opportunities ahead."

Kroger Chairman and CEO Rodney McMullen will continue serving as chairman and CEO of the combined company.

"We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders," McMullen said. "Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores. This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors.

"As a combined entity, we will be better positioned to advance Kroger's successful go-to-market strategy by providing an incredible seamless shopping experience, expanding Our Brands portfolio, and delivering personalized value and savings. We'll also be able to further enhance technology and innovation, promote healthier lifestyles, extend our healthcare and pharmacy network and grow our alternative profit businesses. We believe this transaction will lead to faster and more profitable growth and generate greater returns for our shareholders," McMullen said.

According to Kroger, bringing the best of Albertsons Cos.' own omnichannel capabilities to more customers to improve the shopping experience will allow it to:

• Serve America with fresher food, faster;
• Create a broader selection of its brand products to offer customers higher quality and better value;
• Offer customers best-in-class personalized experience;
• Deliver an enhanced, seamless customer experience requiring zero compromise; and
• Power continued progress toward shared environmental, social and governance initiatives.