Kroger, Albertsons in talks to sell hundreds of stores, some in California, to supply giant C&S

Kroger, Albertsons in talks to sell hundreds of stores, some in California, to supply giant C&S

By Crystal Tse, Michelle F. Davis and Liana Baker | Bloomberg

C&S Wholesale Grocers — with backing from SoftBank Group Corp. — is in talks to buy grocery stores that Kroger Co. and Albertsons Cos. are selling to win regulatory approval for their $25 billion merger, according to people familiar with the matter.

C&S, which has partnered with SoftBank for the transaction, could announce a deal as soon as this week to acquire most or all of the stores they are unloading for antitrust reasons.

Kroger, which owns Ralphs in Southern California, and Albertsons said in October that they would spin off 100 to 375 stores if they couldn’t find buyers for them.

It’s not clear how many stores C&S is acquiring or how much it is paying for them. A story by Reuters indicated the transition would include 400 stores in a deal worth about $2 billion. Most of the stores to be shed are in the Pacific Northwest and Mountain states, Reuters reported, with “some” in California.

SoftBank, the Japanese tech investing giant, is active in the supply chain sector via investments including Symbotic Inc., which is run by Rick Cohen, who is also the executive chairman of C&S.

Representatives for C&S, Kroger and SoftBank declined to comment. Representatives for Albertsons didn’t immediately comment.

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The Kroger-Albertsons deal, which the companies aim to close in early 2024, would combine two of the leading grocery chains in the US into a retail giant with nearly 5,000 stores — large enough to take on leading grocer Walmart Inc.

A number of state treasurers and secretaries of state have urged the Federal Trade Commission to block the deal because they say it would hurt wages and competition. Some senators and members of Congress have criticized the deal too.

C&S, based in Keene, New Hampshire, supplies more than 100,000 different products to more than 7,500 supermarkets, chain stores, military bases and other locations where groceries are sold, according to its website. It also operates two dozen stores under the Grand Union and Piggly Wiggly brands.