Grocery Giants Kroger and Albertsons Unveil $1.9 Billion Divestiture Plan to Secure Merger

Samantha Miller
  • Kroger and Albertsons unveil a $1.9 billion divestiture plan, including the sale of 14 Alaska-based Albertsons-owned stores to C&S Wholesale Grocers, as part of their $24.6 billion merger strategy.
  • C&S Wholesale Grocers, the largest wholesale grocery supplier in the U.S., steps in as the buyer, with a commitment to retaining all frontline associates and existing collective bargaining agreements to alleviate concerns about store closures.
  • Despite concerns and opposition, the merger remains on track for early 2024 closure, pending regulatory approval, and will be closely monitored for its potential impact on competition, store count, and supply chain dynamics, particularly in Alaska.

Kroger and Albertsons, two giants in the food retail industry, have proposed a massive $1.9 billion divestiture plan in an effort to get approval from regulators for their pending $24.6 billion merger. Fourteen Alaska-based grocery stores owned by Albertsons will be sold to C&S Wholesale Grocers, a wholesaler and retailer based in New Hampshire.

The two grocery chains, Fred Meyer (Kroger) and Carrs Safeway (Albertsons), are merging because they want to save money and time by consolidating their operations, especially in areas where they both have a strong presence. The sale of 413 stores to C&S Wholesale Grocers across many states is a significant step toward gaining FTC approval for the enormous operation.

C&S Wholesale Grocers, which opened its doors in 1918, now serves more than 7,500 retail locations and government institutions across the United States. It owns Grand Union and Piggly Wiggly grocery shops in the Midwest and the Carolinas and has annual sales of $33 billion, making it one of the largest privately held firms in the United States.

Concerns have been raised, especially in Alaska, about the possibility of store closures and rising food costs as a result of the announcement. However, a joint statement from Kroger and Albertsons claims that the divestment plan will prevent shop closures. All frontline employees will keep their jobs, and all current collective bargaining agreements will be honored.

Some Alaskans remain skeptical despite these reassurances, citing Safeway’s 1999 purchase of the Carrs business as an example. Given this history, it’s reasonable to wonder if a brand-new Alaskan business would be able to meet the region’s complicated supply chain problems.

Due to its remote location and relatively tiny population, Alaska has high expectations for retail sales. Despite this, analysts believe that C&S Wholesale Grocers can compete with the merged firm without raising antitrust issues due to its financial stability and extensive expertise as a significant grocery supplier.

The proposed divestment in all regions, including Alaska, would be reviewed by the Federal Trade Commission as the merger progresses to ensure compliance with antitrust regulations. More than 400 stores in specific parts of the United States may be put up for auction as a result of this divestiture.

There is mixed sentiment toward the merger, which is expected to occur in early 2024 if it receives the necessary regulatory approvals. While this may lead to a reduction in the number of grocery stores in Alaska and have repercussions for the state’s supply chain, some see it as an essential move for the supermarket companies to make in order to stay competitive in the modern market.

Communities and workers who will be directly impacted by the merger’s potential outcomes will be watching the situation intently as it develops.

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Samantha Miller is a business and finance journalist with over 10 years of experience covering the latest news and trends shaping the corporate landscape. She began her career at The Wall Street Journal, where she reported on major companies and industry developments. Now, Samantha serve as a senior business writer for, profiling influential executives and providing in-depth analysis on business and financial topics.