The proposed closure timing of the merger between Kroger (NYSE:KR) and Albertsons (NYSE:ACI) has been postponed. Initially, the grocery giants expected the deal to close in early 2024. However, they now expect the closing to occur in the first half of Kroger’s Fiscal 2024, ending on August 17, 2024.
The delay is due to the prolonged scrutiny from regulators overseeing the proposed merger. In a joint statement, the companies said that ongoing discussions with the Federal Trade Commission and individual state Attorneys General have led to this new timeline.
The Merger’s Chronological Sequence
Kroger and Albertsons announced the merger in October 2022. Per the deal, Kroger agreed to pay $24.6 billion to acquire all of Albertsons’ outstanding shares. This included Albertsons’ approximately $4.7 billion in net debt.
Subsequently, in September 2023, both companies finalized a definitive agreement with C&S Wholesale Grocers. This agreement involved the divestiture of specific stores and assets, a strategic move aimed at facilitating the merger and obtaining regulatory approval. The deal with C&S encompassed the sale of 413 stores, eight distribution centers, two offices, and five private label brands, spanning 17 states and the District of Columbia.
Is Kroger Stock a Buy or Sell?
Kroger shares are up about 2% in one year, underperforming the S&P 500’s (SPX) nearly 20% gain. Further, Wall Street analysts are cautiously optimistic about KR stock.
Kroger stock has a Moderate Buy consensus rating with five Buy, four Hold, and one Sell recommendations. Analysts’ average price target of $51.1 implies 11.01% upside potential from current levels.
