Kroger to Sell Specialty Pharmacy Business Amid Merger Discussions

As it faces regulatory scrutiny over its potential merger with Albertsons, grocery chain Kroger has decided to sell off its specialty pharmacy business to CarelonRx, a subsidiary of Elevance Health. In a press release Monday, Kroger said the sale is expected to close in the second half of the year.

"As part of our regular review of assets, it became clear that our strong specialty pharmacy business unit will better meet its full potential outside of our business," Kroger Health President Colleen Lindholz said. "One of the most important considerations was continued operations to ensure minimal disruption to our associates and patients. We're confident this transaction will help the business to grow and deliver better results for patients. We look forward to working toward a smooth transition for associates and patients."

Kroger began operating its pharmacy business in 2012, according to Lindholz. It serves patients with chronic illness that require complex care.

Total Retail's Take: The move to sell off its pharmacy business comes as Kroger is in a holding pattern regarding its potential merger with Albertsons. In February, the Federal Trade Commission sued to block the merger, saying it would result in higher prices for consumers and lower wages for workers.

The two companies have proposed divesting several hundred stores and other assets to C&S Wholesale Grocers in an attempt to address antitrust concerns. Shedding additional assets, including its pharmacy business, would seem to align with Kroger's plan to make its acquisition bid for Albertsons more likely to be approved by the FTC.