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Kroger expands into new markets, fattens brand portfolio


CINCINNATI and MATTHEWS, N.C. — Kroger, already one of the world’s largest retailers, is about to get even larger. The company plans to purchase all outstanding shares of Harris Teeter Supermarkets for $49.38 per share in cash.

The merger agreement not only allows Kroger to expand its brands portfolio but also allows it to expand its market with a complementary base of 212 stores, of which 147 have pharmacies, in Southeastern and mid-Atlantic markets and in Washington, D.C.

The stores are located primarily in high-growth markets, vacation destinations and university communities in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia. Harris Teeter, which was founded during the Great Depression, also operates distribution centers for grocery, frozen and perishable foods in Greensboro, N.C., and Indian Trail, N.C., and a dairy facility in High Point, N.C. Harris Teeter had revenues of approximately $4.5 billion for fiscal year 2012.

"We are excited to welcome Harris Teeter to the Kroger family," said David B. Dillon, Kroger's chairman and CEO. "Harris Teeter is an exceptional company with a great brand, friendly and talented associates, and attractive store formats in vibrant markets run by a first-class management team. They share our customer-centric approach to everything we do — from store format and merchandising to innovative loyalty programs. This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates. We look forward to bringing together the best of Kroger and Harris Teeter while continuing to operate and grow the Harris Teeter brands. Together, we can continue to deepen our connections with customers across all of our markets."

"Harris Teeter has a long track record of creating shareholder value and this merger is the culmination of those efforts over many years,” said Thomas W. Dickson, chairman of the board and CEO of Harris Teeter. “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. As part of Kroger, Harris Teeter will be well equipped to continue to provide our customers outstanding quality and customer service as well as excellent value in an increasingly competitive market."

Kroger will finance the transaction with debt and intends to assume Harris Teeter's outstanding debt of approximately $100 million.

As a result of the merger, Kroger will now operate 2,631 supermarkets and will count with more than 368,300 employees across 34 states and the District of Columbia.

Following closing, Harris Teeter will continue to operate its stores as a subsidiary of the Kroger Co. and will continue to be led by key members of Harris Teeter's senior management team. There are no plans to close stores. Kroger headquarters will remain in Cincinnati, and Harris Teeter will keep its headquarters in Matthews, N.C.

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