Kroger-Albertsons Merger Expected to Impact Seafood Product Sourcing

Kroger-Albertsons Merger Expected to Impact Seafood Product Sourcing

Seafood in a grocery store display case. File photo by Margaret Bauman.

Two major national retail supermarket chains, Cincinnati-based Kroger and Albertsons, which is headquartered in Boise, Idaho, have entered into an agreement to merge their organizations. In an announcement this past week the two companies said that they plan to expand customer reach to delivery fresh, affordable food to some 85 million households.

The online publication SeafoodSource said the acquisition is likely to impact how the retailer sources its seafood products. Kroger operates over 2,700 stores compared to nearly 2,300 owned by Albertsons. Insider Intelligence Senior Analyst Blake Droesch said in a statement provided to SeafoodSource that seafood suppliers are likely to be negatively impacted, as the two mammoth retailers – given an expanded base of 85 million households and 66 distribution centers – will have enhanced buying power to negotiate lower prices with vendors.

Kroger is to acquire all outstanding shares of Albertsons Companies’ common and preferred stock for an estimated total consideration of $34.10 a share, for a total enterprise value of some $24.6 billion, including $4.7 billion of Albertsons’ net debt.

As part of the transaction, Albertsons would pay a special cash dividend of up to $4 billion to its shareholders. The cash component of the $34.10 per share consideration would be reduced by the per share amount of the special cash dividend, which is expected to be about $6.85 per share.

The cash dividend is to be payable on Nov. 7 to shareholders of record on the close of business on Oct. 24.

Albertsons and Kroger collectively employ over 710,000 associates and operate a total of 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers.

The joint announcement said that Kroger now plans to invest in lowering prices for customers and expects to reinvest about half a billion dollars of cost savings from synergies to reduce prices for customers.

Source: https://fishermensnews.com/kroger-albertsons-merger-expected-to-impact-seafood-product-sourcing/

Boat Lyfe