The largest U.S. grocery store chain, Kroger Co., just got a bit larger. On Tuesday, Kroger announced its acquisition of Harris Teeter Supermarkets, which increases its exposure from 31 states to 34. The purchase price was said to be $2.4 billion.
The Kroger acquisition is the fourth largest for food retailers in the U.S. in the last decade. It was also Kroger’s largest takeover since 1998, when the company spent over $12 billion to acquire Fred Meyer, according to grocery store industry experts.
The share price for Kroger was up by 96 cents or approximately 2.7% Tuesday and closed at the price of $37.15. Harris Teeter stock was up by 74 cents or 1.5% to $49.26.
Kroger received a set of stores that are in very good condition and will not need any upgrades in the short term. Harris Teeter is Mathews, North Carolina-based and consists of 212 stores in what Kroger called high-growth and attractive markets in both the Mid Atlantic and the Southeast. Harris Teeter had sales of $4.5 billion for fiscal year 2012.
Kroger will pay $49.38 per share for each of the outstanding shares of Harris Teeter stock, which is a premium of 2% over Monday’s close and 33.7% above the price at closing on January 18, when it was announced the company would be evaluating is alternatives.
The Harris Teeter stores will remain in operation following the close of the acquisition deal, as a subsidiary of Kroger Co. The new acquisition now gives Kroger a nationwide market share of 9%, and increases their revenues as a group to close to or over $100 billion annually.