Kroger to Buy Roundy's for $178 Million -- Update
11 Novembre 2015 - 3:47PM
Dow Jones News
By Chelsey Dulaney
Kroger Co. on Wednesday agreed to buy Roundy's Inc. for about
$178 million in cash, as grocer continues to add to its roster of
supermarket chains.
The offer of $3.60 a share is a 65% premium to Roundy's closing
price on Tuesday.
Roundy's shares surged 65% in morning trading to $3.59 a share,
while Kroger shares added 2.2% to $38.08 a share.
The deal will create a grocery chain with 2,774 supermarkets in
35 states and Washington, D.C. Roundy's, which has 151 stores and
101 pharmacies, will continue to operate its stores as a subsidiary
of Kroger. Roundy's banners include Copps, Pick 'n Save, Metro
Market and Mariano's and are located throughout Wisconsin and
Illinois.
Kroger said it doesn't plan to close stores.
Kroger expects the deal to add slightly to its earnings in the
first full year after closing. The company expects $40 million in
cost savings over time.
The deal is expected to close by the end of the year.
Cincinnati-based Kroger has been taking a bigger share of the
food-retail market recently, which has broadened in recent years to
encompass big-box giants like Wal-Mart Stores Inc. and dollar
stores. The company has been buoyed by acquisitions, such as its
deals for Harris Teeter, a higher-end supermarket chain, and
Vitacost.com, which provided access to online ordering and
delivery.
Roundy's also reported results for its third quarter on
Wednesday. The company said sales edged down to $971.8 from $973.8
million a year earlier.
Its loss narrowed to $8.83 from $283.8 million a year earlier
when results were weighed by a $247 million impairment charge.
Excluding that and other special items, adjusted loss was 13
cents a share, compared with 7 cents a share a year earlier.
Analysts had forecast a loss of 9 cents a share on $979.9
million in revenue.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 11, 2015 09:32 ET (14:32 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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