America's No. 2, No. 4 Grocery Chains Plan Merger

Seven years after Albertsons bought Safeway, Kroger is planning to acquire Albertsons in a deal that would create a grocery giant almost big enough to knock Walmart out of the No. 1 spot. Kroger is currently No. 2, and it would likely remain so under the proposed merger: The two saw $209 billion in combined revenue last year, compared to Walmart's $218 billion in grocery sales, the New York Times reports. Kroger said it would buy Albertsons, the No. 4 biggest grocer, for $34.10 a share, around 30% higher than the firm's average share price in recent weeks, reports CNN. The combined company would have around 16% of the US grocery market, with more than 700,000 employees across around 5,000 stores, per CNBC.

"The combination creates a premier seamless ecosystem across 48 states and the District of Columbia, providing customers with a best-in-class shopping experience across both stores and digital channels," the companies said in a statement. The combined company would control dozens of regional chains, including Vons, King Soopers, and Harris Teeter. The merger is expected to be finalized in early 2024, but it will face heavy scrutiny from antitrust regulators, the AP reports. JP Morgan analyst Ken Goldman predicts that the combined chain will have to sell around 400 stores for antitrust reasons, bringing its share of the grocery market down to 13%. The companies said Friday that they are likely to spin off between 100 and 375 stores, mainly on the West Coast, into a separate entity.

Even before the proposed merger was confirmed, it was criticized by the American Economic Liberties Project, a nonprofit that promotes antitrust legislation, the Times reports. "There is no reason to allow two of the biggest supermarket chains in the country to merge—especially with food prices already soaring," the group's chief executive, Sarah Miller, said Thursday. The Times predicts that in talks with administration officials, the companies are likely to stress that their workforces are unionized, unlike workers at Walmart and Amazon, which owns Whole Foods and has a 3% share of the US grocery market. (More supermarkets stories.)