Kroger, Albertsons plan $20 billion merger

Kroger on Friday bid $34.10 per share for Albertsons in a larger effort to compete with Amazon, Walmart, and other companies that have stepped into the grocery business. Kroger will assume $4.7 billion of Albertsons’ debt, but Kroger Chairman and CEO Rodney McMullen said the merger would save his company $1 billion per year in administrative costs. The deal is expected to draw scrutiny from government antitrust regulators.

How big will the new company be? Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including Ralphs, Smith’s, Harris Teeter, and more. Albertsons, based in Boise, Idaho, has 2,273 stores in 34 states and owns brands such as Safeway, Jewel Osco, and Shaw’s. Together the companies employ about 710,000 people. To ease the regulatory process, Kroger and Albertsons said they would divest from stores in markets where they overlap. The companies said they would spin off up to 375 Albertsons stores into a standalone public company.

Dig deeper: Read a report in WORLD magazine from some of the students at this year’s World Journalism Institute about rising food prices.