Kroger, Albertsons in Talks to Sell 400+ Stores as Part of Merger

Grocery chains Kroger and Albertsons plan to sell more than 400 stores to C&S Wholesale Grocers for nearly $2 billion, Reuters reported Wednesday. The sale is part of a proposed $24.5 billion merger between the two companies, which are trying to secure U.S. regulatory clearance.

Reuters reported the deal would give C&S, a privately held supplier that also operates about two dozen stores under the Grand Union and Piggly Wiggly banners, a much more significant footprint. C&S has backing from the Japanese investment group SoftBank Group Corp, Bloomberg reported Tuesday.

People familiar with the matter told Reuters the stores Kroger and Albertsons plan to sell are located primarily in the Pacific Northwest and Mountain states, along with some in California, Texas, Illinois and the East Coast. They said an agreement may be reached as early as this week.

Total Retail's Take: In mergers such as this one, regulators often have a fear of overly large companies monopolizing control over pricing, particularly in a sector as critical as grocery. Sources told Reuters it was unclear if the proposed deal from Albertsons and Kroger to offload store locations would allay regulators' fears.

Kroger and Albertsons announced the merger in October, which was swiftly met by opposition from progressive lawmakers. A Senate antitrust panel was convened in November to focus on how the deal between two category leaders could impact competition in the grocery industry. During the panel hearing, executives from Kroger and Albertsons floated the idea of selling off hundreds of stores, pointing out that the merger would still amount to a smaller footprint than Walmart, the country's top grocer, Reuters reported.