Kroger to buy Giant Eagle for $1.65 billion

Kroger (KR) has entered into an agreement and plan of merger to acquire Giant Eagle, Inc. in a transaction valued at approximately $1.65 billion. The purchase price consists of $1.25 billion in cash and about $400 million in assumed liabilities, subject to customary purchase price adjustments. The planned acquisition adds a regional food and pharmacy retailer to Kroger’s portfolio under a single, cash-financed deal structure.

The companies expect the transaction to close in 2027, subject to the receipt of required regulatory clearances and other customary closing conditions. These conditions include the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The agreement positions Kroger for a multi-year process from signing through anticipated completion.

In connection with securing the regulatory approvals necessary to complete the merger, Kroger and Giant Eagle expect to make limited divestitures of Giant Eagle stores. These divestitures are intended to address regulatory requirements tied to competition in certain local markets. The companies describe the expected divestitures as limited in scope, while maintaining the core of Giant Eagle’s existing footprint.

Beyond divestitures, the transaction remains subject to standard closing conditions that typically apply to large-scale retail mergers. The timeline to an expected 2027 close reflects the anticipated duration of the review process by competition authorities and other relevant regulators.

Kroger plans to finance the acquisition entirely with cash, without relying on equity issuance as a funding source. Following the close of the transaction, the company expects to maintain its net total debt to adjusted EBITDA ratio within a target range of 2.3–2.5x. This leverage target underscores Kroger’s intention to preserve what it describes as a disciplined balance sheet profile.

Kroger also expects to maintain its dividend, subject to approval by its board of directors, and to continue its previously announced $2 billion share repurchase program. Alongside these capital return commitments, the company intends to preserve financial flexibility to invest in its strategic priorities and core business. The transaction is expected to be accretive to adjusted earnings per diluted share in the second full year after closing, excluding one-time transaction and integration costs.

Giant Eagle operates approximately 197 supermarkets and 11 standalone pharmacies. These locations span northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana, giving Kroger exposure to a defined regional network of food and pharmacy outlets. The acquisition would bring this established footprint into Kroger’s broader retail platform once completed.

On the advisory side, RBC Capital Markets is serving as exclusive financial advisor to Kroger, with Jones Day acting as its legal counsel. Giant Eagle is being advised by Wells Fargo as exclusive financial advisor, WilmerHale as primary legal advisor and Troutman Pepper Locke as local counsel. This advisory lineup supports the execution of the agreed transaction through signing, regulatory review and the targeted 2027 close.