Kroger to Buy Harris Teeter for $2.5B

by Christopher Freeburn | July 9, 2013 10:03 am

KrogerLogo Kroger to Buy Harris Teeter for $2.5B[1]Kroger (KR[2]) is about to expand its reach to include three new U.S. states[3].

The supermarket giant announced on Tuesday that it will pay $2.5 billion to purchase Harris Teeter Supermarkets (HTSI[4]). 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.

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%.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2010/10/KrogerLogo.jpg
  2. KR: http://studio-5.financialcontent.com/investplace/quote?Symbol=KR
  3. include three new U.S. states: http://www.usatoday.com/story/money/business/2013/07/09/kroger-harris-teeter-deal/2501231/
  4. HTSI: http://studio-5.financialcontent.com/investplace/quote?Symbol=HTSI

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