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Dealmakers should expect asset sales from the $24.6 billion Kroger-Albertsons' tie-up announced Friday, company officials said on an investor call. 

Why it matters: The transaction would merge the country's second and fourth-largest grocers by market share — and the newly engaged company is already thinking about how to remedy antitrust scrutiny. 

What's happening: A release about the merger detailed plans to establish an Albertsons subsidiary, or SpinCo, spun-off to Albertsons' shareholders following the close of the deal expected in early 2024.

SpinCo is expected to have 100 to 375 stores, the release said.

What they're saying: Analysts asked if SpinCo could be sold. The short answer? Maybe.

"We're confident we have a clear path to achieve regulatory approval with divestitures, and we see SpinCo as one option to address those divests," Kroger CEO Rodney McMullen said on the call.

"It's a clean option to package strategy around divests," he continued. "Any store we divest, we intend to fully market them and we look at SpinCo as one option within that plan. And depending, the level of divestitures will obviously shape the size of what SpinCo will look like."

The intrigue: One analyst cited Seattle and Denver as potential markets to divest, given a heavily concentrated combined market share.

Kroger-Albertsons will spur more deals

Illustration of an Albertsons' grocery bag inside of a Kroger's bag.

Dealmakers are waiting in the wings after Kroger said it's buying Albertsons for about $24.6 billion.

Next week we'll examine the combined heft in pharmacies, plus developing storylines.

October 14, 2022

Kroger-Albertsons will spur more deals