Kroger to Buy Harris Teeter for $2.5B

The combined company will operate 2,631 supermarkets

   

KrogerLogo Kroger to Buy Harris Teeter for $2.5BKroger (KR) is about to expand its reach to include three new U.S. states.

The supermarket giant announced on Tuesday that it will pay $2.5 billion to purchase Harris Teeter Supermarkets (HTSI). Under the deal, which has been approved by both companies’ boards, Kroger will acquire Harris Teeter shares for a 2% premium over their Monday closing price, USA TODAY notes.

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Kroger will assume $100 million in Harris Teeter’s debt under the deal, which will be financed with debt of its own.

After the purchase, Kroger will operate 2,631 supermarkets in 34 states — up from a current 31 — and the District of Columbia. Harris Teeter will become a Kroger subsidiary.

The acquisition will produce cost savings of between $40 million and $50 million during the next four years, Kroger estimates.

News of the acquisition sent Kroger shares up more than 2% in Tuesday morning trading, while Harris Teeter climbed more than 1%.


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/kroger-to-buy-harris-teeter-for-2-5b/.

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