Kroger Completes Merger with Harris Teeter
Closing a deal that began with its announcement last summer, The Kroger Co. and Harris Teeter Supermarkets Inc. have completed their merger that sees the 227-store southeast regional chain joining forces with the nation's largest traditional grocery retailer.
“We are pleased that our merger is complete and look forward to bringing together the best of Kroger and Harris Teeter to benefit our customers, associates and shareholders,” said W. Rodney McMullen, Kroger's CEO. “This merger brings the exceptional Harris Teeter brand and a complementary base of stores in attractive markets to the Kroger family. We have long respected Harris Teeter’s customer orientation, friendly and professional associates, strong management team, and company values – which are consistent with ours. Together, through our Customer 1st Strategy, we are going to be an outstanding combination.”
Together, the company will operate 2,641 supermarkets and employ more than 368,000 associates across 34 states and the District of Columbia. The transaction allows Kroger to expand with the popular Harris Teeter brand and its base of 227 stores in the fast-growing Southeastern and mid-Atlantic markets, as well as Washington, D.C. With headquarters in Matthews, N.C., Harris Teeter also operates distribution centers for grocery, frozen and perishable foods in Greensboro and Indian Trail, N.C., and a dairy facility in High Point, N.C.
Harris Teeter will operate stores under its own name as a Kroger subsidiary and will continue to be led by Harris Teeter’s current president, Fred Morganthall. Harris Teeter had revenues of $4.7 billion for fiscal year 2013, operating in North Carolina, South Carolina, Virginia, Georgia, Tennessee, Maryland, Delaware, Florida and the District of Columbia.
While there are no plans to close stores, there are some personnel changes with the merger completion.
Thomas W. Dickson is retiring as Harris Teeter's chairman and CEO. “We are excited that Kroger, one of the best food retailers in the U.S., has recognized the value in Harris Teeter," Dickson said. "The merger with Kroger provides the opportunity to continue to expand the Harris Teeter brand as well as to provide future employment and career advancement opportunities for our associates in an increasingly competitive market. The merger also is the culmination of a long track record of delivering substantial value to our shareholders.”
McMullen remarked: “Tad has done an outstanding job as the CEO for the past 16 years. “During his tenure as CEO, the management team of Harris Teeter has more than doubled the sales of the company and increased the operating profit fourfold by building over 100 new stores, expanding into new markets and improving the overall operating performance of the company. We look forward to working closely with the management team to continue to expand the Harris Teeter brand.”
Further, Harris Teeter EVP John Woodlief, who has served as CFO since 1999, has resigned. Independence rules concerning Woodlief’s previous position with PricewaterhouseCoopers, who serve as Kroger’s independent accountants, prohibit him from serving in a financial role with Kroger. He will pursue other interests and will be available for consultation to the company.
Under the terms of the merger agreement, completed Jan. 28, Harris Teeter shareholders will receive $49.38 per share of Harris Teeter common stock.
Cincinnati-based Kroger now operates 2,641 supermarkets and multidepartment stores in 34 states and the District of Columbia under two dozen local banner names including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry's, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith's.