Albertsons, Kroger Close To Selling Stores To SoftBank-Backed Buyer, Clearing Path For Merger
Albertsons and Kroger are closing in on the sale of an unknown number of stores across the country to clear the way for their nearly $26B merger.
C&S Wholesale Grocers, operator of grocery chains like Piggly Wiggly and Grand Union, has partnered with Japanese investor SoftBank to buy the stores for an undisclosed amount, Bloomberg reported.
Reuters reported in February that the grocers would sell between 250 and 300 stores valued at around $1B in the hope of appeasing regulators concerned about the merger's potential effects on grocery prices and food affordability. Last year, senators asked the Federal Trade Commission to investigate the two companies' plans to combine. Together, Albertsons and Kroger operate almost 5,000 stores nationwide.
A sell-off of some stores as a concession for a larger merger isn't unprecedented. Albertsons' $9B acquisition of Safeway in 2014 was made possible because it agreed to sell 146 stores to a smaller regional grocer for $300M, Reuters reported.
The FTC is reviewing the proposed Albertsons-Kroger merger.
The grocery segment has been performing well, and physical stores are gaining traction they lost to online grocery sales in the early days of the pandemic.
Aldi, a fast-growing grocery chain, last month signed a deal to purchase 400 Winn-Dixie and Harveys grocery stores.
SoftBank's investments in the food and logistics industry include delivery startup GoPuff and Symbotic Inc., a company that facilitates order fulfillment in warehouses through robotics. The latter is run by Rick Cohen, who is also the executive chairman of C&S.
