The Kroger Co. and Giant Eagle announced a definitive agreement under which Kroger will acquire Giant Eagle. Giant Eagle is a family-owned food and pharmacy retailer with about $9 billion in annual sales, 197 supermarkets, and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland, and Indiana.
The transaction has been unanimously approved by Kroger’s Board of Directors.
The purchase price is $1.65 billion, including $1.25 billion in cash consideration and the assumption of about $400 million in outstanding liabilities. Kroger said the acquisition aligns with its disciplined capital allocation strategy and its focus on deals that can create value for customers, associates, and shareholders.
Kroger said Giant Eagle is a strong strategic fit due to its regional grocery presence, customer loyalty, fresh product offering, pharmacy business, and private label portfolio. The acquisition will expand Kroger’s reach into attractive adjacent markets while giving the company a larger platform for growth across stores, e-commerce, data, personalization, and customer experience.
The companies also plan to build on Giant Eagle’s history of community engagement by bringing Kroger’s Zero Hunger | Zero Waste impact plan to new communities.
Kroger will finance the transaction with cash. After the transaction closes, Kroger expects to maintain its net total debt to adjusted EBITDA ratio target range of 2.3x to 2.5x. The company also expects to maintain its dividend, subject to board approval, continue its previously announced $2 billion share repurchase program, and preserve financial flexibility to invest in strategic priorities and its core business.
Kroger expects the deal to be accretive to adjusted diluted EPS in the second full year after closing, excluding one-time transaction and integration costs.
As part of the regulatory clearance process, Kroger and Giant Eagle expect to make limited Giant Eagle store divestitures. The transaction is expected to close in 2027, subject to required regulatory clearance and other customary closing conditions.
RBC Capital Markets is serving as exclusive financial advisor to Kroger, and Jones Day is serving as Kroger’s legal counsel. Wells Fargo is serving as exclusive financial advisor to Giant Eagle, while WilmerHale is serving as primary legal advisor and Troutman Pepper Locke is serving as local counsel for Giant Eagle.
Kroger serves more than 11 million customers daily through its e-commerce and store experiences under multiple banner names. Giant Eagle was founded in 1931 and has grown into one of the nation’s largest food retailers and distributors.
KEY QUOTES:
“Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty. We evaluated the opportunity carefully, and the strategic fit is clear. Giant Eagle expands our reach into attractive adjacent markets, allowing us to do what we do best: Run outstanding stores, deliver fresh foods and convenient meal solutions at affordable prices, and take care of our customers and associates every single day.”
Greg Foran, CEO of Kroger
“Today’s announcement marks an exciting next chapter for our Team Members, customers, vendors and community partners. Together with Kroger, we will be well-positioned to advance our strategy and deliver better quality and service, better everyday value, and a better shopping experience for our customers, while providing greater growth opportunities for our dedicated Team Members.”
Bill Artman, CEO of Giant Eagle
