Kroger to buy Harris Teeter chain for $2.5 billion
Publish Date: July 09, 2013
The Kroger Co. will buy the 212-store Harris Teeter Supermarkets chain for about $2.5 billion in a deal that will give the grocery giant access to fast-growing Southeastern markets.
North Carolina–based Harris Teeter — whose stores are in southeastern and mid-Atlantic markets and in Washington, D.C. — had revenues of approximately $4.5 billion for fiscal year 2012. The retailer has been on a sales growth trajectory for the past six quarters, and announced plans to seek a buyer in February. The combined companies will operate 2,631 supermarkets.
The deal will be the fourth-largest acquisition of a North American food retailer in the past 10 years, according to data compiled by Bloomberg. Following closing, Harris Teeter will continue to operate its stores as a subsidiary of Cincinnati–based The Kroger Co., and will continue to be led by key members of Harris Teeter’s senior management team. No store closings are planned, David B. Dillon, Kroger’s chairman and CEO, said in a press release. Kroger expects to achieve annual cost savings of approximately $40 to $50 million over the next three to four years. Much of the savings is expected to come from the benefits of Kroger's scale, Dillon says.