Supermarket giant Kroger's (NYSE:KR) agreement to buy Roundy's (NYSE:RNDY) would expand Kroger's reach in the Midwest, giving it a footprint in Milwaukee, Madison, northern Wisconsin and stores in Chicago.
Cincinnati-based Kroger would pay $3.60 per share cash in a deal valued at about $178 million, or $800 million including Roundy's debt. Roundy's has 151 stores and 101 pharmacies. Together, Kroger and Roundy's will operate 2,774 supermarkets.
Kroger, with annual sales of about $109 billion, is the parent of its namesake stores, as well as Ralphs, Kwik Shop, Fred Meyer, Food 4 Less and other chains.
Among Kroger's nearest rivals are natural and organic foods chain Whole Foods Market (NASDAQ:WFM) with roughly $15.4 billion annual sales, and discount chain Supervalu (NYSE:SVU), with just over $18 billion a year revenue. But Kroger is getting increasing competition from other quarters.
World's largest retailer Wal-Mart Stores (NYSE:WMT) and big-box discounter Target (NYSE:TGT) have beefed up their food departments in recent years. Amazon.com (NASDAQ:AMZN) and other retailers sell groceries online and Amazon has a home delivery service.
Mariano's CEO Robert Mariano
The Cincinnati grocery giant is buying Milwaukee-based Roundy's. But Mariano's CEO Robert Mariano says "nothing's going to change in our stores."
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