Parent companies of King Soopers, Safeway grocery stores announce merger Friday
CINCINNATI, OH and BOISE, ID (KRDO) -- Kroger, the parent company of King Soopers, announced Friday that it has entered into a definitive agreement to merge with Albertsons, which is the parent company of Safeway.
In a press release issued Friday morning, Kroger says the merger "will expand customer reach and improve proximity to deliver fresh and affordable food to approximately 85 million households with a premier omnichannel experience."
Under the terms of the agreement, Kroger will purchase all of the outstanding shares of Albertsons Companies, Inc., for an estimated $34.10 a share. That equals about $24.6 billion. Additionally, Albertsons will pay a dividend of up to $4 billion to its shareholders, or around $6.85 per share.
Collectively, Kroger and Albertsons employ more than 700,000 people and operate a total of nearly 5,000 stores across the country.
The United Food and Commercial Workers Union is opposing the merger. In a statement released Thursday night, Local 7 stated that the merger "will no doubt create a monopoly in the grocery industry for many communities, with one company owning a $47 billion market share."
However, Kroger and Albertsons officials said that one of their primary reasons for merging is to provide workers with better pay and benefits.
According to a press release on the merger: "Kroger will also build on its recent investments in associate wages, training and benefits. Kroger has invested an incremental $1.2 billion in associate compensation and benefits since 2018. The combined company expects to invest $1 billion to continue raising associate wages and comprehensive benefits after close."
Another stated goal is to make prices lower for shoppers.
"Kroger plans to invest in lowering prices for customers and expects to reinvest approximately half a billion dollars 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," the release explained.
The focus on lower prices excited customers who learned of the merger.
"Maybe some more savings and deals will go through," said Jack Sanzo. "I definitely see my gas rewards kind of go back and forth, so any discount would be great."
Mike Abdouch said that he's not worried that the merger will discontinue his favorite brands.
"I think we can adjust to the different types of food and stuff," he said. "But really, right now, our number-one concern is cost. Feeding a family is a lot harder now, because money doesn't go as far."
Mark Kurtz is among shoppers who's not sure if supermarket industry consolidation is a good thing.
"I think it's kind of interesting how Safeway was bought out by Albertsons originally, and now the whole thing's being bought out by Kroger," he said. "I just wish they would keep it more independent, so there's better prices."
Late Friday afternoon, Colorado Attorney General Phil Weiser released a statement promising to follow the merger to ensure that it's in the best interest of workers and customers.
