MATTHEWS – Harris Teeter and Kroger announced a merger after months of buyout rumors for the Mathews-based grocery chain.
Kroger will buy all outstanding shares of Harris Teeter for $49.38 per share in cash or approximately $2.5 billion.
Kroger will finance the transaction with debt and intends to assume Harris Teeter’s outstanding debt of approximately $100 million.
The transaction price represents a premium of 33.7 percent to the Harris Teeter closing share price on Jan. 18, 2013, the day of the first media report that Harris Teeter was evaluating strategic alternatives.
Kroger expects to achieve annual cost savings of approximately $40 to $50 million over the next three to four years.
Harris Teeter’s 212 stores are located primarily in high-growth markets, vacation destinations and university communities in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia.
Rumors of a new location in the Antiquity development of Cornelius have been floating around after the architects distributed a mock drawing with a Harris Teeter in place.
“Harris Teeter has a long track record of creating shareholder value and this merger is the culmination of those efforts over many years,” said Thomas W. Dickson, Chairman of the Board and Chief Executive Officer of Harris Teeter. “We are excited about becoming part of The Kroger Co., one of the best food retailers in the U.S. while maintaining the Harris Teeter banner, our management teams, our new store growth plan, our distribution and manufacturing facilities in North Carolina as well as our headquarters in Matthews, N.C.”
Kroger, one of the world's largest retailers, employs 343,000 associates in 2,419 supermarkets and multi-department stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's. The company also operates 784 convenience stores, 322 fine jewelry stores, 1,182 supermarket fuel centers and 37 food-processing plants in the U.S.
“We are excited to welcome Harris Teeter to the Kroger family,” said David Dillon, Kroger's chairman and CEO. “This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates.”