Harris Teeter, Kroger complete $2.5B merger
Shares of Harris Teeter stock ceased trading on the New York Stock Exchange on Tuesday.
Harris Teeter will keep its name, brands, and Matthews headquarters. It will operate as a Kroger subsidiary under the direction of current Harris Teeter President Fred Morganthall.
The deal will benefit Kroger (NYSE:KR) and Harris Teeter customers, associates and shareholders, says W. Rodney McMullen, chief executive of Kroger. "This merger brings the exceptional Harris Teeter brand and a complementary base of stores in attractive markets to the Kroger family,” McMullen says. “We have long respected Harris Teeter's customer orientation, friendly and professional associates, strong management team, and company values – which are consistent with ours.”
Kroger financed the transaction through a combination of debt issued in December and commercial paper. The grocery chain expects net accretion to earnings per diluted share in the range of 6 cents to 9 cents in the first full year after the merger, excluding transition and transaction expenses.
Kroger also expects to achieve cost savings of approximately $40 million to $50 million, largely from the benefits of Kroger's enhanced scale, within the next four years.
Dickson will retire as part of the merger. Kroger also announced that John Woodlief, executive vice president and chief financial officer, will resign.
In total, Kroger will now operate 2,641 supermarkets and employ more than 368,000 people across 34 states and the District of Columbia. It operates those stores under more than two dozen banners, including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry's, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith's.
Source: bizjournals.com
