Cincinnati -- The Kroger Co. has reached an agreement to purchase all outstanding shares of Harris Teeter Supermarkets for $49.38 per share in cash, or about $2.5 billion. Kroger will finance the transaction with debt and also assume about $100 million of debt from Harris Teeter.
Harris Teeter operates 212 stores in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia primarily in the Carolinas. The company had revenues of approximately $4.5 billion for fiscal year 2012.
Together, the company will operate 2,631 supermarkets and employ over 368,300 associates across 34 states and the District of Columbia. In a press release, Kroger described Harris Teeter’s stores as primarily located in “high-growth markets, vacation destinations and university communities.”
Following closing, Harris Teeter will continue to operate its stores as a subsidiary of Kroger and will continue to be led by key members of Harris Teeter's senior management team. There are no plans to close stores, and associates will continue to have employment opportunities with both companies. Kroger headquarters will remain in Cincinnati, and Harris Teeter will keep its headquarters in Matthews, N.C.
"This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates,” said David B. Dillon, Kroger's chairman and CEO. “We look forward to bringing together the best of Kroger and Harris Teeter while continuing to operate and grow the Harris Teeter brands"
"We are excited about becoming part of The Kroger Co., one of the best food retailers in the U.S. while maintaining the Harris Teeter banner, our management teams, our new store growth plan, our distribution and manufacturing facilities in North Carolina as well as our headquarters in Matthews, N.C.,” said Thomas W. Dickson, chairman of the board and CEO of Harris Teeter.
The merger is expected to close following the satisfaction of customary closing conditions including approval by Harris Teeter shareholders and regulatory approval. The boards of directors of both companies have approved the transaction. Merrill Lynch is acting as exclusive financial advisor to Kroger and Arnold & Porter, LLP is acting as legal advisor to Kroger. J.P. Morgan Securities LLC is acting as exclusive financial advisor to Harris Teeter and provided a fairness opinion to its board of directors. McGuireWoods LLP is acting as legal advisor to Harris Teeter.