(Update) Takeover talks between US supermarket giants Albertsons and Kroger have been finalized: together they will form the second largest supermarket group in the US. A setback for Ahold Delhaize?
Second largest in the US
It is not Ahold Delhaize but Kroger that will acquire Albertsons, the US supermarket group behind Safeway, Jewel-Osco and Albertsons. Aeroplane spotters had seen private jets from Ahold Delhaize and Albertsons flying towards each other this summer and inferred that the supermarket chains were holding takeover talks, but now US media are reporting that Kroger is paying 24.6 billion dollars (about 25 billion euros) to take over Albertsons.
Together, Albertsons and Kroger form the second largest supermarket group in the United States. Only Walmart remains larger. Their combined market value is about 47 billion dollars and the deal accounts for one of the largest retail acquisitions in recent years.
Kroger recorded 138 billion dollars in sales last year and has nearly 2,800 stores. 2021 was a successful year for the retailer, which also enjoyed another strong quarter. Non-fuel sales rose 5.8% this summer, while the group raised its full-year profit forecast despite high inflation and costs.
Predicted by Frans Muller?
Although Albertsons announced in February that it was exploring “strategic options” for an acquisition, that supermarket group also had a solid quarter. In the quarter to mid-June, comparable sales rose 6.8% to 23.3 billion dollars. However, the company urgently needs to invest in revamping stores and cannot keep up with the rapidly evolving retail market on its own.
Competitor Ahold Delhaize may disappointed. Albertsons and Ahold Delhaize would be very complementary geographically and give the group national coverage. But things have turned out differently: a strengthened Kroger will now provide hefty additional competition. As recently as this week – possibly anticipating the Kroger news – CEO Frans Muller let it be known that he was eyeing acquisitions. “The market is going to consolidate further,” the top executive said.