EG Group, a privately-held petrol forecourt convenience store retailer based in the United Kingdom, announced a definitive agreement to purchase The Kroger Co., Cincinnati, for $2.15 billion.
As part of the agreement, EG Group will establish its North American headquarters in Cincinnati, Ohio, and continue to operate stores under its established banner names.
Kroger announced in October 2017 its intention to explore strategic alternatives for its convenience store business, including a potential sale, in conjunction with Restock Kroger.
"Our convenience store business has been a part of our company for many years. We want to thank our management team and associates for their enduring commitment to our customers, and for the contributions they have made to build our supermarket fuel business," says Mike Schlotman, Kroger's executive vice president and CFO. "As part of our regular review of assets, it has become clear that our strong convenience store business unit will better meet its full potential outside of our business."
"One of the most important considerations in our decision-making process was continued operations to ensure minimal disruption to our associates. We are very pleased the EG Group plans to establish their North American headquarters in Cincinnati. EG Group is also a recognized international petrol forecourt convenience operator, and they have a commercial model [that] clearly looks to enhance the consumer offer by working with leading retail brands customers know and trust," adds Schlotman. "This is good for our associates across the country and for our headquarter city of Cincinnati. Throughout the process, we were impressed with the EG Group's professionalism, investment commitment, and more importantly, their understanding of the U.S. convenience retail market. We now look forward to working with them closely to ensure a smooth transition for associates."
"This is an exciting time for EG Group; the entry into the U.S. market presents a fantastic opportunity to deliver a successful retail offer to consumers across the various states,” says Mohsin Issa, EG Group founder and co-CEO. “We have had much success across Europe, and we firmly believe the Kroger assets present a fantastic foundation to overlay our retail experience and know-how in the U.S. We are committed to investing in the Kroger network, partnering with leading retail brands and working with the exceptional management team and associates transferring across to deliver a comprehensive retail offer."
"Our business model is simple but effective – EG Group is creating a stronger relationship between consumers and leading retail brands they want to access. In the U.S., we aim to create a retail environment [that] delivers convenience, provides value and serves as a retail destination offering excellent welfare to motorists who live and work near our petrol forecourt convenience retail stores," adds Zuber Issa, EG Group founder and co-CEO.
Kroger's convenience store business operates in 18 states, under the following banner names—Turkey Hill, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quik Stop. It also includes 66 franchise operations, and employs 11,000 associates. Kroger's supermarket fuel centers and Turkey Hill Dairy are not included in the sale.