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Kroger and Albertsons beef up divestiture deal to take on FTC

Illustration of a statue of Justice holding a bag of groceries

Illustration: Sarah Grillo/Axios

Kroger and Albertsons have increased the number of store locations they are selling to C&S Wholesale under an amended divestiture package.

Why it matters: The two grocers will sell 579 stores as they bolster the defense of their deal ahead of facing the FTC in court in August.

Catch up quick: The initial agreement last year was to sell 413 stores, distribution centers, offices and private label brands for $1.9 billion in cash to C&S.

Zoom in: The new deal increases the store count by 166.

  • It also adds Haggen to the list of banners being sold to C&S, which previously included QFC, Mariano's and Carrs.
  • C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado, while Kroger will re-banner the stores under those names that it keeps in those states.
  • Kroger will maintain the Albertsons and Safeway banners in the remaining states.

What they're saying: "We have reached an agreement with C&S for an updated divestiture package that maintains Kroger's commitments to customers, associates and communities, addresses concerns raised by regulators, and will further ensure that C&S can successfully operate the divested stores as they are operated today," said Kroger's CEO Rodney McMullen in a statement.

Our thought bubble: The grocers are pulling out all the stops to get the court's nod, including making unprecedented divestiture concessions ahead of a trial — indicating Kroger and Albertsons are concerned about the deal's chances.

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