Kroger (NYSE:KR) and Albertsons (NYSE:ACI) are reportedly in talks to sell several of their grocery stores to C&S Wholesale Grocers. The agreement is expected to be disclosed later this week. The reason behind this sale is to gain approval from the Federal Trade Commission for Kroger’s planned $24.6 billion acquisition of Albertsons.
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C&S Wholesale collaborated with SoftBank Group (SFTBY) for this potential transaction. At this time, the exact number of stores to be acquired by C&S and the transaction amount are unknown.
Hurdles in Kroger-Albertsons Merger Deal
The combination of the nation’s first- and second-largest supermarket retailers into a single company, announced in October 2022, has raised several concerns. The secretaries of seven states, including Arizona, Colorado, Maine, Minnesota, New Mexico, Rhode Island, and Vermont, requested the FTC block the deal last month.
The states believe that the merger would give Kroger-Albertsons the power to influence prices. They expect this could negatively affect farmers and shippers. In addition, the secretaries expressed concerns that the merger would further strain American families that are already struggling due to high inflation.
What is the Price Target for KR?
On TipRanks, KR stock has a Moderate Buy consensus rating based on six Buys and five Holds. Meanwhile, the average price target of $51.82 implies upside potential of 15.1%. Shares of the company have gained about 3% year-to-date.
Investors should note that Argus Research analyst Chris Graja is the most accurate analyst for KR stock, according to TipRanks. Copying his trades on KR and holding each position for one year could result in about 73% of your transactions generating a profit, with an average return of 16.17% per trade.
