The largest grocery store chain in the US is getting bigger.
Kroger Co. said today it is buying Harris Teeter Supermarkets in a deal valued at $2.4 billion .
The deal will be the fourth-largest acquisition of a North American food retailer the past decade. It also would be Kroger’s biggest takeover since 1998, when it bought Fred Meyer for more than $12 billion, according to financial media giant Bloomberg.
Kroger has seven supermarkets in Hampton Roads and is scheduled to open the region’s first Kroger Marketplace – a larger format that sells furniture and jewelry in addition to groceries – later this month in Virginia Beach. It plans to expand that concept to two more locations in Portsmouth and Suffolk.
Harris Teeter, based in Matthews, N.C., has 15 stores in Hampton Roads and the Outer Banks of North Carolina.
After the deal closes, Harris Teeter will continue to operate its stores as a subsidiary of Kroger, which will then have 9% market share nationwide.
The proposed merger of The Kroger Co. and Harris Teeter Supermarkets Inc. would make Hampton Roads one of a handful of markets where the two grocers overlap – in some cases with stores right next to each other.
That could force the combined company to close or sell at least a few local stores.
"We look forward to bringing together the best of Kroger and Harris Teeter while continuing to operate and grow the Harris Teeter brands," Mike Schlotman, Kroger’s chief financial officer, said during a Tuesday conference call with analysts.
Kroger has no plans to close stores and intends to keep the Harris Teeter name, Schlotman said. The chains have "minor overlap" in Hampton Roads, Charlottesville and in the Raleigh, N.C., and Nashville, Tenn., areas, he said. "We’re making plans for how we’ll operate in each of these markets in the long term."
The deal requires approval from the Federal Trade Commission, which could require the company to sell off some locations where the combined retailers would wield too much market control. That’s likely to happen in Hampton Roads because of the amount of overlap, said Jeff Metzger, publisher of Food World, a supermarket industry publication based in Columbia, Md.
Metzger said he also expects Kroger to eventually choose one of the two names under which to operate all of its stores in this region.