Kroger is buying regional grocer and pharmacy retailer Giant Eagle in a deal valued at $1.65 billion.
Giant Eagle, which is privately held, has 197 supermarkets and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana. Kroger has thousands of stores operating under various brands, including Ralphs, King Soopers, Smith’s and Fred Meyer.
The transaction includes $1.25 billion in cash and the assumption of approximately $400 million in outstanding liabilities, the companies said Wednesday.
“Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty,” Kroger CEO Greg Foran said in a statement. “We evaluated the opportunity carefully, and the strategic fit is clear.”
Foran, a former Walmart executive, was named Kroger’s CEO in February. He has a reputation as a tech-savvy and detail-oriented leader.
Kroger and Giant Eagle said that they anticipate having to divest a limited number of Giant Eagle stores in order to receive the necessary regulatory clearance for the transaction.
The deal is expected to close next year.
Kroger’s stock fell nearly 3% before the market open.
The Associated Press contributed to this article