Kroger, the nation’s largest supermarket operator, and Acme Markets parent company Albertsons are in talks about a merger, according to multiple reports. Bloomberg News, which first reported the news, said a deal could be reached as early as this week.
Acme currently operates 164 stores in Pennsylvania, New Jersey, Delaware, New York, Connecticut and Maryland. Albertsons, which also includes Safeway, Jewel-Osco, Kings and Vons, has 2,250 stores overall. Kroger has 2,742 stores in 35 states and double the annual revenue of Albertsons.
“This is the type of transaction that really looks good on paper, but the actual practicality of achieving regulatory approval by the FTC could be difficult,” according to Bloomberg Analyst Jennifer Bartashus. “There is a lot of overlap in very competitive markets.”
However, James Lewis, an equity research analyst at Bartlett Wealth Management, doesn’t think antitrust issues are a deal breaker.
“An argument supporting a deal could be made if Kroger emphasizes the total market for food retailing, online as well as in-store,” Lewis said. “Market share within the industry is less concentrated if online is quantified.”