CHICAGO (CBS) -- Cincinnati-based Kroger Co. has announced plans to acquire Roundy's, which owns 34 Mariano's groceries in the Chicago area.
The $800 million merger with Milwaukee-based Roundy's represents a relatively modest acquisition for Kroger, which has 2,623 supermarkets across the country, compared to 151 groceries for Roundy's in Illinois and Wisconsin.
The main attraction for Kroger likely was the profitable Mariano's chain in the Chicago area, rather than the larger but struggling Pick 'n Save chain in Wisconsin.
""We admire what [Roundy's CEO] 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," said Kroger chairman and CEO Rodney McMullen. "Kroger's scale and strong financial position will enable Roundy's to reinvest in its home state of Wisconsin while continuing to grow in Chicago. Together, we are committed to investing in Roundy's people, communities, stores and merchandising to deliver a fantastic customer experience that will create opportunities for associates, grow customer loyalty and revenue, and create value for shareholders."
Kroger will purchase all outstanding shares of Roundy's for $3.60 per share, about 65 percent over the Roundy's closing price of $2.19 a share on Tuesday.
The boards for both companies have approved the merger.
Kroger said there are no plans to close any stores, and Roundy's employees would have job opportunities with both companies. Roundy's managers would continue to run their stores as Kroger subsidiaries. While the announcement of the merger did not mention anything about whether store names would change, Kroger typically does not change the names of other stores it has acquired. For example, the Food 4 Less chain in the Chicago area kept its name after it was acquired by Kroger in the 1990s.
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