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Kroger, Roundy's to Merge

The Kroger Co and Roundy's Inc. have inked a definitive merger deal, through which the joint company will operate 2,774 supermarkets and employ more than 422,000 associates across 35 states and the District of Columbia. The transaction is expected to close by the end of the 2015.

Through the agreement, Kroger will purchase all outstanding shares of Roundy's for $3.60 per share in cash, or $800 million. Roundy's will continue to operate its stores as a subsidiary of The Kroger Co. and will continue to be led by members of Roundy's senior management team. There are no plans to close stores, and associates will have employment opportunities with both companies, according to a press release.

"We are delighted to welcome Roundy's to the Kroger family," said Rodney McMullen, Kroger's chairman and CEO. "With a team of 22,000 talented associates, outstanding store locations, and a shared commitment to putting customers first, we are excited about Roundy's future growth."

Roundy's brings to Kroger an expanded footprint with 151 stores and 101 pharmacies in Milwaukee, Madison and Northern Wisconsin, which are served under the Pick 'n Save, Copps and Metro Market banners, as well as Mariano's in Chicagoland.

"Mergers for Kroger always involve both parties bringing something to the table," McMullen said. "We admire what Bob Mariano has done with the Mariano's banner in Chicago, where he has created an urban format that is resonating with customers and we expect to apply Roundy's experience to our stores in urban areas around the country."

Added Mariano, chairman of the board, president and CEO of Roundy's, "We are excited about becoming part of The Kroger Co. Kroger's scale, knowledge and experience allows us to accelerate the strategic initiatives we have invested in and makes us a more formidable competitor in the marketplace. This is a great win for our customers, communities, employees and our shareholders, and I personally look forward to continue to exceed customer and employee expectations."

The merger agreement is subject to the satisfaction of customary closing conditions, including completion of the tender offer and regulatory approval.



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