- C&S Wholesale Wholesale Grocers, with financial backing from SoftBank Group Corp., is in talks to buy grocery stores that Kroger and Albertsons are looking to sell to get regulatory approval for their proposed merger, Bloomberg reported Tuesday, citing unnamed people familiar with the matter.
- On Wednesday, Reuters also said that Kroger, Albertsons and C&S are nearing a deal, reporting that the transaction would involve selling more than 400 grocery stores to C&S for almost $2 billion, according to unnamed people familiar with the matter.
- The stores that Kroger and Albertsons want to offload are mainly in the Pacific Northwest and the Mountain states, plus some in California, Texas, Illinois and the East Coast, Reuters reported.
According to the Bloomberg report, a store acquisition deal could come as soon as this week.
Reuters reported that C&S is in talks with SoftBank for help with financing a small portion of the deal, per one unnamed source.
Kroger and Albertsons said last fall they would likely have to divest between 100 and 375 stores to satisfy regulators. A Reuters report in February said the companies narrowed the planned divestiture range to between 250 to 300 stores, citing unnamed sources.
Albertsons declined to comment. Kroger, SoftBank and C&S each did not respond to a request for comment by publication time.
Kroger CEO Rodney McMullen said that the grocer has been talking to several potential buyers for stores the company plans to offload for the merger, declining to be more specific, The Oregonian reported at the end of August.
Kroger has “been very pleased with the level of interest,” McMullen told the news outlet, noting that Kroger is looking for “somebody that knows how to run supermarkets” with capital to successfully operate the stores and who would recognize the stores’ existing employee unions.
The proposed $24.6 billion merger, which was announced last October, is currently undergoing regulatory review. Kroger and Albertsons executives have said they expect the deal to close in early 2024.
C&S, which has been in business for over a century and operates stores under the Grand Union and Piggly Wiggly banners, has seen highs and lows in recent years. The company lost major clients like Ahold Delhaize, which transitioned to a self-managed distribution network in 2019, and Key Food, which signed on with competitor United Natural Foods, Inc. in 2020.
In 2021, C&S bought Piggly Wiggly Midwest and later that year announced plans to purchase 12 Tops Markets stores as part of the Tops-Price Chopper divestiture process. C&S rebranded the Tops stores under the storied Grand Union name.
Last month, C&S announced Chief Operating Officer Eric Winn will take over as CEO when Bob Palmer retires on Oct. 2.
The Japanese investment firm SoftBank has been active in the grocery and technology spaces. In 2021, AutoStore’s shareholders agreed to sell 40% of the company to SoftBank for $2.8 billion. SoftBank Vision Fund 2 has been involved in funding rounds for ethnic e-grocer Weee, autonomous checkout technology provider Standard Cognition, retail computer vision and analytics provider Trax, Gopuff and Norwegian e-grocer Oda.
Peyton Bigora contributed reporting.