Breaking News Bar
updated: 7/9/2013 9:55 AM

Kroger to buy Harris Teeter for about $2.44 billion

hello
Success - Article sent! close
 
Associated Press

CINCINNATI -- Kroger, the country's largest traditional supermarket operator, said Tuesday that it has agreed to buy Harris Teeter Supermarkets Inc. for about $2.44 billion in cash.

The deal expands Cincinnati-based Kroger's store base in the southeastern and mid-Atlantic markets and increases the number of states it operates in by three to 34.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

Under the terms of the agreement, Kroger will pay $49.38 for each of the fellow supermarket chain's shares. The price represents a 2 percent increase over the company's Monday closing stock price.

"This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates," Kroger Chairman and CEO David Dillon said in a statement.

The deal has been approved by both companies' boards. Harris Teeter announced in February that it was exploring strategic alternatives, including a possible sale.

Harris Teeter operates 212 stores in eight southeastern and mid-Atlantic states and Washington DC, along with a pair of distribution centers and a dairy facility in North Carolina. Its fiscal 2012 revenue totaled about $4.5 billion.

In comparison, Kroger operates 2,419 stores in 31 states. In addition to its flagship brand of supermarkets, it also owns Ralphs, Fry's and Food 4 Less.

After the deal closes, Harris Teeter will become a Kroger subsidiary and will continue to be led by members of its current senior management.  There are no plans to close stores and the company will remain based in Matthews, N.C.

Kroger Co. says it expects the deal to result in cost savings of $40 million to $50 million over the next three to four years. It will finance the deal with debt and plans to assume Harris Teeter's outstanding debt of about $100 million.

In premarket trading, Harris Teeter shares edged up 42 cents to $48.95, while Kroger shares rose 37 cents to $36.56.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here