Investor Benefits

Compelling Value Creation Opportunity for Shareholders

  • On a combined basis, the two companies delivered ~$210B in revenue, $3.3B in net earnings and $11.6B of adjusted EBITDA in FY 20211

  • The combined capabilities will accelerate growth of Alternative Profit Businesses

  • Expect to deliver ~$1B of annual run-rate synergies net of divestitures within the first four years following close, with 50% achieved within the first two years post-close, largely through improved sourcing, optimization of manufacturing and distribution networks, and technology investment amplification opportunities

  • More resilient business model expected to deliver TSR well above Kroger's standalone model of 8 – 11% during the first four years post close

  • Transaction expected to be accretive to earnings in the first year following close and double digit accretive to earnings by year four, excluding one-time costs

  • Kroger is strongly committed to an investment grade credit rating and has already paused its share repurchase program to prioritize de-leveraging to achieve 2.5x EBITDA net leverage target in first 18 – 24 months post-merger

Facade of Kroger store
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Key Terms

  • Purchase price of $24.6B, including the assumption of approximately $4.7B of Albertsons Cos. net debt

  • All-cash transaction to acquire Albertsons Cos. for an estimated total consideration of $34.10 per share

  • Premium of ~32.8% to unaffected closing price of Albertsons Cos. common stock on October 12, 2022, and 29.7% to the 30-day VWAP

  • Albertsons Cos. intends to declare and pay special cash dividend of up to $4B before close, which will reduce purchase price commensurately

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Expected Closing

Completion expected in the first half of Kroger's fiscal 2024

Subject to receipt of required regulatory clearance and other customary closing conditions, including HSR clearance

As a mechanism to accomplish store divestitures in certain areas, Albertsons Cos. is prepared to establish a subsidiary to be spun-off to Albertsons Cos. shareholders immediately prior to close and operate as standalone public company; SpinCo would be new, agile competitor with quality stores, experienced management, operational flexibility, a strong balance sheet and focused allocation of capital and resources to provide customers with continued value and quality service and associates with ongoing compelling career opportunities

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Rodney McMullen, Chairman and Chief Executive Officer

1 Based on combined results for each company’s most recent fiscal year, respectively.

Complementary Footprints Establish National Reach

Fuel Centers
Private Label Products
Our Brands Porfolio
Annual Alternative Profits opportunity
Fresh Sales

What People Are Saying:

“Kroger’s current business model is founded on four pillars: fresh, private brands, personalization and seamless (omnichannel). By delivering on these four pillars, the company continues to churn out profitable sales growth at a time when the grocery market is oversaturated, hypercompetitive and an exceedingly expensive industry in which to operate.”

Progressive Grocer

"…we believe the combination could strengthen KR’s ability to compete with other large players and drive significant L-T earnings/cash flow accretion.

We believe a KR/ACI combination could better compete with WMT, AMZN, and TGT at a national level."

Rupesh Parikh