Kroger To Acquire Albertsons Companies; Enterprise Value Of Deal At Approx. $24.6 Bln

(RTTNews) - Kroger (KR) and Albertsons Companies, Inc. (ACI) have entered into a definitive agreement under which Kroger will acquire all of the outstanding shares of Albertsons Companies, Inc. common and preferred stock for an estimated total consideration of $34.10 per share, implying a total enterprise value of approximately $24.6 billion, including the assumption of approximately $4.7 billion of Albertsons Cos. net debt.

The companies said, subject to the outcome of a store divestiture process, the cash component of the $34.10 per share consideration may be reduced by the per share value of a newly created standalone public company that Albertsons is prepared to spin off at closing in conjunction with the regulatory clearance process.

Albertsons will pay a special cash dividend of up to $4 billion to its shareholders. The company noted that the cash component of the $34.10 per share consideration will be reduced by the per share amount of the special cash dividend, which is expected to be approximately $6.85 per share. The cash dividend will be payable on November 7, 2022, to shareholders of record as of the close of business on October 24, 2022.

Kroger expects the acquisition to be accretive to earnings in the first year following close, and double digit accretive to earnings by year four, excluding one-time costs.

Rodney McMullen will continue to serve as Chairman and CEO and Gary Millerchip will continue to serve as CFO of the combined company.