UPDATE, 7/11/13, 3 p.m. EST: Lawyers representing Merrill Lynch as Kroger's financial advisor have been added to the eighth paragraph of this article.
The Kroger Company said Tuesday that it is expanding its presence in the southeastern and mid-Atlantic regions of the United States by agreeing to acquire North Carolina–based grocery store chain Harris Teeter Supermarkets Inc. for $2.5 billion, including assumed debt.
As a result of the deal, Cincinnati-based Kroger—already the country’s largest traditional grocer—will operate 2,631 supermarkets spread across 34 states and Washington, D.C. Harris Teeter currently operates 212 stores in eight mostly Southeast states and Washington, D.C.
The transaction’s terms call for Kroger to pay Harris Teeter $2.4 billion in cash, or $49.38 per share, and assume roughly $100 million of the target company's debt. The purchase price represents a roughly 2 percent premium over the closing price of Harris Teeter stock as of Monday and, according to a Kroger press release announcing the deal, a nearly 34 percent premium over the company's closing stock price on January 18, when the company’s interest in possibly being acquired was first reported. Kroger said it plans to finance the transaction with debt.
