CINCINNATI — The Kroger grocery store chain said Tuesday that it is buying the Harris Teeter chain in a deal valued at $2.5 billion.
Harris Teeter will operate as a subsidiary of Kroger and will keep its management team at its Matthews, N.C., headquarters, Kroger said.
Together, the two brands will operate 2,631 stores in 34 states and the District of Columbia and will have 368,300 employees, Kroger said in announcing the deal.
There are no plans to close stores, the announcement said.
Kroger said it is getting an exceptional brand and complementary base of 212 stores in attractive southeastern and mid-Atlantic markets and in Washington, D.C.
Kroger said it will finance the deal with debt and will pay Harris Teeter shareholders $49.38 in cash per share if they and regulators approve the deal.
The Cincinnati-based company will assume about $100 million in Harris Teeter debt, but will allocate free cash to pay down the total debt over the next 18 to 24 months to return to its current debt-to-earnings ratio.
Harris Teeters 212 stores are in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia.
Its total revenue was about $4.5 billion in 2012.
Kroger said it has 2,419 supermarkets and multidepartment stores in 31 states and operates under several brand names.
The chain also has 784 convenience stores, 322 jewelry stores, 1,182 gas stations at supermarkets and 37 food-processing plants.
We are excited to welcome Harris Teeter to the Kroger family, said David B. Dillon, Kroger chairman and CEO. Harris Teeter is an exceptional company with a great brand, friendly and talented associates, and attractive store formats in vibrant markets run by a first-class management team.
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