Kroger Co. in $1.65 billion deal to acquire Giant Eagle
The Kroger Co. is expanding its already wide reach.
The grocery giant has agreed to acquire Giant Eagle Inc. for $1.65 billion, comprised of $1.25 billion in cash consideration and the assumption of approximately $400 million in outstanding liabilities. The family-owned Giant Eagle operates 197 supermarkets and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana, with annual sales of approximately $9 billion.
The deal is the first under the leadership of CEO Greg Foran, who took the reins of the company in February 2026. It's also Kroger's first major acquisition since its failed $25 billion plan to merge with Albertsons Cos. in 2024.
In connection with obtaining the requisite regulatory clearance necessary to complete the deal, Kroger and Giant Eagle said they expect to make limited Giant Eagle store divestitures. The transaction, which has been unanimously approved by Kroger’s board of directors, is expected to close in 2027, subject to required regulatory clearance and other customary closing conditions.
Kroger said the deal is consistent with its “disciplined approach to capital allocation and its focus on acquisitions where the company can create clear value for customers, associates and shareholders.” It comes after Kroger's failed $25 billion plan to merge with Albertsons Cos. in 2024.
Kroger is the biggest grocer in the U.S. by sales after Walmart. The company operates more than 2,700 stores under a variety of banners.
“Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty," said Greg Foran. "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."
Kroger is facing increased competition in the grocery sector, not only from Walmart and Amazon but also from value and specialty grocers such as Aldi and Trader Joe's.
"Adding a new regional banner like Giant Eagle not only can add scale to Kroger’s presence nationally, but also help it compete with superstores, warehouse clubs, and other value-grocery formats that are currently all winning in an overly competitive grocery market," said Elizabeth Lafontaine, Director of Research at Placer.ai.
Giant Eagle's established store base, loyalty program, pharmacy business and private label portfolio provide a strong foundation for growth, Kroger said in a release. Together with Kroger's e-commerce solutions, data and personalization capabilities and operating discipline, "we see significant opportunity to accelerate growth both in-store and online, enhance the customer experience and create long-term value for shareholders," the company stated.
Giant Eagle was founded in 1931. The company is based in Pittsburgh.
"Today's announcement marks an exciting next chapter for our team members, customers, vendors and community partners," said Bill Artman, CEO, Giant Eagle. "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."
Financial impact
Kroger will finance the transaction with cash. Following the close of the transaction, the company expects to maintain its net total debt to adjusted EBITDA ratio target range of 2.3 – 2.5x. As part of Kroger's commitment to shareholder returns, the company 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 its strategic priorities and core business.
Kroger expects the transaction to be accretive to adjusted EPS per diluted share in the second full year after close, excluding one-time transaction and integration costs.
Advisors
RBC Capital Markets is serving as exclusive financial advisor, and Jones Day is serving as legal counsel to Kroger.
Wells Fargo is serving as exclusive financial advisor to Giant Eagle. WilmerHale is serving as the primary legal advisor and Troutman Pepper Locke is serving as local counsel on Giant Eagle's behalf.
