The Kroger Co., Cincinnati, and Roundy's, Inc., Milwaukee, Wis., announced a definitive merger agreement under which Kroger will purchase all outstanding shares of Roundy's for $3.60 per share in cash.
"We are delighted to welcome Roundy's to the Kroger family," says 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."
"Mergers for Kroger always involve both parties bringing something to the table," McMullen adds. "We admire what Bob Mariano [chairman of the board, president and CEO of Mariano’s] 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. Kroger's scale and strong financial position will enable Roundy's to re-invest 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."
"We are excited about becoming part of The Kroger Co.,” says Mariano. “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. "
Roundy's brings to Kroger an expanded footprint with a complementary base of 151 stores and 101 pharmacies in new geographies, including Milwaukee, Madison and Northern Wisconsin, which are served under the Pick 'n Save, Copps and Metro Market banners. The merger also expands Kroger's presence with an innovative store format in the Chicagoland area, where Roundy's operates 34 stores under the Mariano's banner. Roundy's also operates two distribution centers in Oconomowoc and Mazomanie, Wis., and a commissary in Kenosha, Wis. Roundy's had revenues of nearly $4 billion for fiscal year 2014.
Together, Kroger and Roundy's will operate 2,774 supermarkets and employ over 422,000 associates across 35 states and the District of Columbia. Following closing, Roundy's will continue to operate its stores as a subsidiary of The Kroger Co. and will continue to be led by key members of Roundy's senior management team. Roundy's headquarters will remain in Milwaukee.
The transaction is expected to close by the end of the 2015 calendar year.