WILMINGTON, NC (WECT/AP) – Kroger management will soon be taking over Harris Teeter Supermarkets, Inc.
Kroger announced Tuesday it has agreed to buy Harris Teeter Supermarkets Inc. for about $2.44 billion in cash.
Kroger will pay $49.38 for each of its rival supermarket chain's shares. The price represents a 2 percent increase over the company's Monday closing stock price. The deal has been approved by both companies' boards.
According to a news release, Harris Teeter will bring a base of 212 stores in southeastern and mid-Atlantic markets and in Washington, DC.
"We are excited to welcome Harris Teeter to the Kroger family," said David B. Dillon, Kroger's Chairman and Chief Executive Officer. "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."
Dillon went on to say in the news release that this is a "financially and strategically compelling transaction and unique opportunity for our shareholders and associates."
"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 Chief Executive Officer 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, NC. 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."
According to a news release, there are no plans to close any stores and associates will continue to have employment opportunities with both companies.
Cincinnati-based Kroger Co. says it expects the deal to result in cost savings of $40 million to $50 million over the next three to four years.
Kroger will finance the deal with debt and plans to assume Harris Teeter's outstanding debt of about $100 million.
Copyright 2013 WECT. All rights reserved. The AP contributed to this report.
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