Sources: Kroger Nears Acquisition of Albertsons
Kroger could announce a deal to buy rival grocery company Albertsons this week, sources told CNBC’s David Faber. Shares of Albertsons jumped and were briefly halted Thursday morning after news that two companies are deep in talks. The stock was up more than 11 percent in afternoon trading. Kroger rose modestly. The all-cash acquisition may be announced as soon as Friday morning, sources told Faber. Kroger is the larger of the two companies, with a market cap of about $32 billion. Albertsons’ market cap is about $15 billion.
Total Retail's Take: Potential consolidation in the grocery sector shouldn't be unexpected with Amazon.com's growing presence in the category, driven by its acquisition of Whole Foods. A combined Kroger-Albertsons organization would be a strong player to contend with given the physical footprint of the two companies and its significant capital to invest in technology to continue to improve customers' grocery shopping experiences, both in-store and online. For example, Kroger has already purchased British online grocer Ocado to build huge robot-powered fulfillment centers to pick and pack online grocery orders. That strength could be further leveraged across Albertsons' 2,000-plus store locations as well. We'll update this story as more developments arise, including any official announcements from Kroger or Albertsons.
