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FTC rings up Kroger's deal
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May 27, 1999: 5:33 p.m. ET
Purchase of Fred Meyer will create largest U.S. supermarket chain
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NEW YORK (CNNfn) - The Federal Trade Commission approved Kroger Co.'s $12.8 billion acquisition of Fred Meyer Stores Inc. Thursday, opening the express line for the largest supermarket chain in the nation.
Following the closing, Kroger (KR) will have 2,200 grocery stores in 31 states. The companies said they expected to close the deal by the end of business Thursday.
The FTC said Kroger must divest five stores in Arizona, Wyoming, and Utah. Fred Meyer (FMY) must divest three stores in Arizona and Wyoming to resolve the agency's antitrust issues.
The Cincinnati-based Kroger announced in October it would buy the Portland, Ore.-based Fred Meyer for $8 billion in stock plus the assumption of $4.8 billion in debt.
The two companies had combined sales in fiscal 1998 of $43 billion.
Kroger said it expects to save $75 million in the first 12 months, $150 million in the second 12 months and $225 million in the third 12 months.
The deal, originally valued at $12.8 billion, rose to $13.5 billion as the value of Kroger's stock increased.
Kroger said in a statement that the merged company holds the No. 1 or No. 2 position in 33 of the nation's 100 largest markets and will have a major presence in 10 of the 15 fastest-growing markets.
Kroger has about 1,300 stores in 24 states, while Fred Meyer has about 800 stores in 12 western states.
Kroger closed up ½ to 54-11/16. Fred Meyer was up 9/16 at 54-1/8.
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