KROGER has released an update on the 400 stores it plans to sell, potentially allowing an ongoing merger with Albertsons to finally take place.
A spokesman said Fred Meyer, a Kroger subsidiary, is not being sold to address antitrust concerns, but confirmed the fate of some other locations.
Although Kroger announced the $25 billion merger last October, the two companies have struggled to complete the deal amid concerns from the U.S. Congress that it could be a monopoly.
The company’s reach will be so vast that it could control the prices of food and other essential goods for those who have few options other than competitors.
To reduce their influence, Kroger and Albertsons agreed to sell $2 billion in stores, which would amount to 413 storefronts nationwide.
New Hampshire-based C&S Wholesale Grocers wrote the check to acquire the stores in 17 states and Washington DC.
The deal worried shoppers in the Northeast, who feared their favorite supermarket, Fred Meyer, could be bought out as part of the deal.
Starting in 1989, the brand became a subsidiary of Kroger – now the largest supermarket chain in the country.
However, a spokesperson confirmed that Fred Meyer was not on the chopping block and revealed the stores being purchased by C&S, The Oregonian reports.
The deal includes the sale of the QFC, Carrs and Mariano banners to C&S, as well as a licensing agreement that would allow C&S to use the Albertson brand name in some states.
According to Tiffany Sanders, corporate affairs manager at Fred Meyer, all gas stations and in-store pharmacies remain open.
While she said some QFC stores were on the list, she could not disclose the full list at this time because negotiations are still ongoing.
“Because we are still in the regulatory process, we cannot share the specific locations included in the agreement,” Sanders said in a statement.
Recent talks between Kroger, Albertsons and C&S Wholesale Grocers are believed to be nearing completion.
If the deal goes through, C&S will expand its footprint, which currently consists of about two dozen locations under the Grand Union and Piggly Wiggly brands.
After C&S lost one of its largest customers, Ahold Delhaize, in 2019, the deal would be a relief for the company.
A source said SoftBank Group Corp., a Japanese investment group, is negotiating a deal with C&S to finance part of the purchase.
The stores to be divested by the combined retailers are believed to be located primarily in the Pacific Northwest and Rocky Mountain states.
Others from California, Texas, Illinois and the East Coast are also believed to be lost in the sale.
Sources suggested a deal could be reached this week, but it is not confirmed whether the sale will be enough to allay regulators’ fears.
Kroger CEO Rodney McMullen and his Albertsons colleague Vivek Sankaran were forced to defend their merger before senators on the Subcommittee on Competition Policy, Antitrust and Consumer Rights.
In a letter, Congress expressed its concerns, saying: “We urge the Federal Trade Commission to carefully examine the likely competitive impact of this acquisition.”
“This acquisition threatens to create anti-competitive concentration in markets across the country, harming consumers, workers and small businesses.”