The proposed $24.6 billion purchase of Albertsons Cos. by Kroger Co. took a twist this week, when Kroger identified 101 Albertsons and Safeway stores in Arizona that it would buy, then divest to a third party, C&S Wholesale Grocers.
The unusual transaction is designed to placate the Federal Trade Commission and other regulators who worry that a combined Kroger-Albertsons would give the resulting company too much concentration in states like Arizona. The merger has not yet been approved.
Customers of Albertsons and Safeway are wondering what's in store for them. Here are some answers:
Kroger and Albertsons merger: These 101 grocery stores across Arizona could be sold
Who owns Albertsons and Safeway stores in Arizona?
Albertsons Cos. owns both Albertsons supermarkets and Safeways in Arizona, along with various other supermarket chains elsewhere around the country, such as Vons and Pavilions in California. Albertsons Cos., which has been a public company since 2020, generated $79 billion in revenue over its most recent fiscal year. The company is headquartered in Boise, Idaho.
How big are Albertsons-Safeway and Kroger-Fry's chains in Arizona?
Albertsons owns 135 Albertsons and Safeway stores in Arizona, with about 14,500 employees in the state. Kroger owns 131 Fry's Food Stores including a handful of Smith's locations, with an Arizona staff of just under 20,000. Of those 135, Kroger would retain 34 of the acquired Albertsons or Safeway supermarkets, if the deal goes through.
If the merger is approved, how would that shake out in Arizona?
The current plan is for Kroger to buy all 135 Albertsons/Safeway properties, then sell 101 of them to C&S Wholesale Grocers, a company that operates Piggly Wiggly supermarkets and other stores, primarily in Wisconsin, Georgia, the Carolinas and other states back east. C&S would retain the Safeway name for those stores, though it's unclear what banner the Albertsons here would take. Also unclear is what the acquired stores that Kroger retains would be called, though they'd presumably be renamed as Fry's.
Why would Kroger buy and then divest so many stores in Arizona?
Again, that's designed to appease regulators who are seeking to block the acquisition. Arizona is a fairly concentrated state for supermarkets, meaning that both Kroger/Fry's and Albertsons/Safeway are roughly the same size.
This ignores the fact that Walmart, Amazon and Costco sell more groceries nationally than either Kroger/Fry's or Albertsons/Safeway.
Albertsons Cos. currently owns more stores in California, Texas, Washington and Illinois, but the impact of this proposed transaction is relatively large in Arizona. All told, Albertsons Cos. owns nearly 2,300 stores in 34 states and the District of Columbia, along with more than 1,700 pharmacies. Albertsons Cos. is the No. 1 or No. 2 grocery player in most of the states in which it operates, including Arizona.
Who owns Albertsons Cos. currently?
Albertsons Cos. has been a public company since 2020, meaning it has a broad shareholder base. That said, private investment giant Cerberus owns a hefty 30% of Albertsons.
Who is Albertsons' top executive?
The company is headed by CEO Vivek Sankaran, 61, who previously worked for PepsiCo and other businesses. Incidentally, his $15.1 million compensation in 2023 was about 475 times the median Albertsons employee pay of $31,178. His pay was a bit higher than the average for CEOs at Arizona-based corporations.
Reach the writer at russ.wiles@arizonarepublic.com.
This article originally appeared on Arizona Republic: Kroger merger: Who owns Safeway's Arizona stores? What will happen to those supermarkets?
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