Cincinnati-based Kroger Co. said Wednesday that it has officially closed its acquisition of homegrown supermarket company Harris Teeter, which is now a subsidiary of the Kroger conglomerate.
Although Harris Teeter will keep its Matthews offices, its name and a degree of autonomy following the $2.5 billion deal, two high-ranking executives at Harris Teeter are leaving the company, Kroger said.
Chairman and CEO Thomas Dickson is retiring, and longtime chief financial officer John Woodlief is leaving to pursue other interests, Kroger said. Harris Teeter will be led by the company’s current president, Fred Morganthall.
“The merger with Kroger provides the opportunity to continue to expand the Harris Teeter brand as well as to provide future employment and career advancement opportunities for our associates in an increasingly competitive market,” said Dickson, in a statement.
Kroger CEO Rodney McMullen praised Harris Teeter. He also said the deal gives Kroger better access to “attractive markets.” About two-thirds of Harris Teeter’s stores are in North Carolina.
“We are pleased that our merger is complete and look forward to bringing together the best of Kroger and Harris Teeter to benefit our customers, associates and shareholders,” McMullen said in a statement.
The acquisition propels Kroger into the rarefied ranks of companies with more than $100 billion worth of annual sales. There are 21 other such companies on the Fortune 500 list, including Apple, Bank of America and General Motors.
And the acquisition also removes a local headquarters from Charlotte. In recent years, the area has seen several major local companies acquired, including Wachovia, Goodrich Corp., and now Harris Teeter.
Harris Teeter shareholders will receive $49.38 a share from Kroger, which financed the deal with cash and debt offerings.
Kroger said it expects to achieve cost savings of $40 to $50 million within four years, helping make the Harris Teeter acquisition profitable. The company said it will rely “largely from the benefits of Kroger’s enhanced scale,” which could get Harris Teeter access to better prices for merchandise than before, as a smaller, standalone company. The combined company will also look at combining some behind-the-scenes and administrative functions to save money.
Kroger is a much more far-flung company than Harris Teeter, operating thousands of stores under two dozen different names, including Kroger, Fred Meyer, Fry’s, Dillons, King Soopers, QFC and Ralphs.
Portillo: 704-358-5041; Twitter: @ESPortillo