Aberdeen Safeway not among divestiture in Albertsons/Kroger merger proposal

CBS/KXRO – On Tuesday, the parent companies of Kroger and Albertsons released an amended plan and agreement with C&S Wholesale Grocers for the sale of stores throughout the nation if their proposed merger were to go through. 

Kroger and Albertsons, two of the nation’s largest grocers, agreed to merge in October 2022. In February of this year, the Federal Trade Commission sued to block the merger—saying the $24.6 billion deal could result in higher prices for millions of American consumers.

The amended plan is in response to concerns raised by federal and state antitrust regulators regarding the original agreement, modifying and expanding assets that would be sold to C&S that the companies say would allow them to operate competitively following the completion of the proposed merger. 

“We have reached an agreement with C&S for an updated divestiture package that maintains Kroger’s commitments to customers, associates and communities, addresses concerns raised by regulators, and will further ensure that C&S can successfully operate the divested stores as they are operated today,” said Rodney McMullen, Kroger’s Chairman and CEO. “Importantly, the updated divestiture plan continues to ensure no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages. Our proposed merger with Albertsons will bring lower prices and more choices to more customers and secure the long-term future of unionized grocery jobs.”

579 stores were listed across the companies’ portfolios that would be sold to, and continue operating by the new owner if the merger is approved. 

Image from Kroger/Albertsons/C&S

Outside of their namesakes, the two companies also own the brands Safeway, Vons, Pavilions, and other stores.

124 stores within Washington were included in the list, although the Aberdeen Safeway was not among the list and would remain under the combined company as a Safeway. 

The number of stores contained in the divestiture plan by geography is as follows:

  • WA: 124 Albertsons Cos. and Kroger stores
  • CA: 63 Albertsons Cos. stores
  • CO: 91 Albertsons Cos. stores
  • OR: 62 Albertsons Cos. and Kroger stores
  • TX/LA: 30 Albertsons Cos. stores
  • AZ: 101 Albertsons Cos. stores
  • NV: 16 Albertsons Cos. stores
  • IL: 35 Albertsons Cos. and Kroger stores
  • AK: 18 Albertsons Cos. stores
  • ID: 10 Albertsons Cos. stores
  • NM: 9 Albertsons Cos. stores
  • MT/UT/WY: 11 Albertsons Cos. stores
  • DC/MD/VA/DE: 9 Harris Teeter stores

The United Food and Commercial Workers union, which represents 835,000 grocery workers in the U.S. and Canada, voted last year to oppose the merger, saying Kroger and Albertsons had failed to be transparent about the potential impact it would have on workers.

Kroger has promised to invest $500 million to lower prices as soon as the deal closes. It said it also invested in price reductions when it merged with Harris Teeter in 2014 and Roundy’s in 2016. 

Kroger also promised to invest $1.3 billion into store improvements at Albertsons as part of the deal.

Last year, C&S Wholesale Grocers agreed to purchase 413 stores and eight distribution centers that Kroger and Albertsons agreed to divest in markets where the two companies’ stores overlapped. C&S said it would honor all collective bargaining agreements with workers.