Kroger Co. and Albertsons Cos Inc. are getting closer to sealing a deal aimed at gaining the green light from regulators for their massive $24.5 billion merger. They plan to sell over 400 grocery stores to C&S Wholesale Grocers for approximately $2 billion, as per insiders familiar with the situation.
This agreement is poised to significantly expand C&S Wholesale Grocers, a company primarily known for supplying groceries and operating a limited number of stores under the Grand Union and Piggly Wiggly brands. Interestingly, SoftBank Group Corp., a well-known Japanese investment firm, is in talks with C&S to provide partial financing for the deal. This connection arises from SoftBank's involvement with C&S's executive chairman, Rick Cohen, through their joint venture with the warehouse automation company Symbotic Inc., where Cohen serves as CEO.
Now, let's break down what this all means in simpler terms. Kroger and Albertsons are planning to sell some of their grocery stores to another company called C&S Wholesale Grocers. This will make C&S bigger in the grocery business. What's cool is that SoftBank, a big investment company, might help pay for this.
The stores they want to sell are mostly in the Pacific Northwest and the Mountain states, with some in places like California, Texas, Illinois, and the East Coast. This way, they hope to show the people who make the rules that their merger won't make grocery prices too high.
But here's the thing – we're not sure if this plan will work with the people who make the rules. The folks who told us all this didn't want to give their names because it's a secret deal. Kroger and Albertsons didn't want to talk about it either. C&S and SoftBank didn't say anything either. A news company called Bloomberg told us about this, but they didn't give all the details.
Before this, Kroger and Albertsons said they might sell some stores, but they didn't say how many. They talked about maybe making a new company with these stores, and some numbers like 100, 375, and even 650 stores were mentioned. It's kind of like rearranging their stuff.
For C&S Wholesale Grocers, this deal is a big deal because they lost a big customer in 2019 when Ahold Delhaize started getting groceries on their own. That's why C&S wants to have more stores now to stay competitive.
To sum it up, Kroger and Albertsons want to sell some stores to C&S Wholesale Grocers. SoftBank might help pay for it. They're selling stores in different places to show they won't control grocery prices too much. But we don't know if this plan will work with the people who make the rules. It's all a bit secretive, and everyone's staying quiet about it. Kroger and Albertsons talked about selling stores before, but they didn't give exact numbers. C&S Wholesale Grocers wants more stores because they lost a big customer. So, it's a big move in the world of groceries!
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