Watch out Wal-Mart: Kroger buys supermarket chain

The acquisition of Harris Teeter will mean an additional 212 stores, many of them in wealthy college towns, for the nation's largest grocery chain.

By Forbes Digital Jul 9, 2013 2:33PM

Kroger (KR), the nation's largest grocery chain, just added 212 stores in eight states to its arsenal with an all-cash purchase of regional supermarket chain Harris Teeter (HTSI) in a deal valued at $2.44 billion.

The merger will see Kroger, a historically Midwestern outfit, gain further foothold in Southern and Mid-Atlantic areas it described as "high-growth markets, vacation destinations and university communities."

These include such sought-after spots as North Carolina's Outer Banks, wealthy Washington, D.C. suburb Fairfax, Virginia, and rich urban enclaves like Greensboro and Charlotte, N.C.

Harris Teeter had in recent years come under increasing pressure from regional competitor Publix (PUSH), not to mention retail juggernaut Wal-Mart (WMT) as the latter began its rollout of standalone grocery stores.

The Matthews, N.C., chain, which posted 2012 revenues of $4.5 billion, announced it was exploring a sale back in February, retaining J.P. Morgan as an advisor.

Tuesday's deal will see Kroger purchase all outstanding shares of Harris Teeter for $49.38 per share in cash as well as assuming $100 million of debt. Kroger will remain the second largest retail chain in the U.S. despite this deal, with Wal-Mart pulling in over five times the revenue of the Cincinnati-based grocer in 2012.

Kroger said in a statement at the time of the merger that stores under the Harris Teeter banner would not be renamed.

"Following closing, Harris Teeter will continue to operate its stores as a subsidiary of The Kroger Co. and will continue to be led by key members of Harris Teeter's senior management team," said the announcement.

"There are no plans to close stores, and associates will continue to have employment opportunities with both companies."

More from Forbes
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

114
114 rated 1
280
280 rated 2
473
473 rated 3
639
639 rated 4
637
637 rated 5
662
662 rated 6
640
640 rated 7
498
498 rated 8
287
287 rated 9
121
121 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
COPCONOCOPHILLIPS9
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
KOGKODIAK OIL & GAS Corp9
CVXCHEVRON CORPORATION8
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.