Kroger and Albertsons Cos. Inc. have entered into a definitive agreement under which the companies will merge.

Kroger Co. has agreed to buy Albertsons Cos. in a deal valued at  $24.6 billion and bringing together the U.S.'s No.4 and No. 5 grocery retailers.

Kroger’s revenue grew 4% in 2021 compared with the previous year, to more than $137 billion. The company operates 2,726 stores under the Kroger, Harris Teeter and Smith’s banners. Albertsons' revenue was more than $71 billion in 2021. The company's 2,278 stores operate under the Safeway, Albertsons and Vons grocery banners.

Kroger said the deal with Albertsons combines two companies with well-known and trusted supermarket banners serving approximately 85 million U.S. households.

"Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores," said Rodney McMullen, Kroger chairman and CEO. "This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies."

McMullen, who also will serve as chairman and CEO of the combined company, said that under the merger Kroger seeks to combine the strengths of each company while maintaining and enhancing each grocer's distinctive banners and company histories.

In connection with the transaction, Kroger and Albertsons will spin off an estimated 100 to 375 stores.

The transaction is expected to close in early 2024.

Source: Kroger