The Kroger Co. is acquiring Giant Eagle, a family-owned grocery and pharmacy chain generating $9 billion in annual sales and operating 197 supermarkets and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana.
The purchase price is $1.65 billion comprising $1.25 billion in cash considerations and the assumption of approximately $400 million in outstanding liabilities. Kroger said the transaction is consistent with its disciplined approach to capital allocation and focus on acquisitions with which the company can create clear value for customers, associates and shareholders.
Kroger stated it would build on Giant Eagle’s established store base, loyalty program, pharmacy business and private label portfolio by adding Kroger’s e-commerce solutions, data and personalization capabilities, and operating discipline. With that, Kroger said it expects to accelerate Giant Eagle’s in-store and online growth, enhance customer experience and create long-term value for shareholders.
Kroger reported it will finance the transaction with cash. Following the close, the company expects to maintain its net total debt to adjusted EBITDA ratio target range of 2.3 times to 2.5 times. Kroger expects the transaction to close in 2027, subject to receipt of regulatory clearance and other customary closing conditions, and be accretive to adjusted EPS per diluted share in the second full year after close, less one-time transactions and integration costs.
Kroger said it intends to retain the Giant Eagle name and Pittsburgh headquarters. In connection with obtaining regulatory clearance needed to finalize the transaction, Kroger expects to make limited Giant Eagle store divestitures.
“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, Kroger CEO. “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.”
