DENVER — A total of 91 Safeway locations in Colorado will be sold to C&S Wholesale Grocers under a new agreement in the ongoing saga of the proposed merger of Kroger and Albertsons.
The companies announced the updated divestiture plan Monday in their latest effort to quell the federal government’s concerns about their proposed merger.
The new plan involves selling 579 Kroger and Albertsons stores in markets where they overlap to C&S, a New Hampshire grocery supplier and operator, for $2.9 billion. Under the initial divestiture plan, announced in September, C&S had planned to purchase 413 stores for $1.9 billion.
Under the new plan, C&S would purchase 91 Safeway locations in Colorado under a license agreement and continue to operate the locations under the Safeway banner, according to a press release from the companies. C&S would also get access to some private-label brands in the stores.
There are currently 103 Safeway stores and two Albertsons stores in Colorado. Kroger — operating as King Soopers and City Market in Colorado — will re-banner the 14 retained Albertsons and Safeway bannered stores in the state following the closing of the merger, the companies said in the release.
Exact details regarding which 14 Safeway locations in Colorado will be re-bannered to King Soopers or City Market are not known at this time. C&S would also license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona.
"Importantly, the updated divestiture plan continues to ensure no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages. Our proposed merger with Albertsons will bring lower prices and more choices to more customers and secure the long-term future of unionized grocery jobs," Kroger Chairman and CEO Rodney McMullen said in a statement.
It’s unclear if the new plan will satisfy regulators. In February, the U.S. Federal Trade Commission sued to block the $24.6 billion merger between the grocery giants, saying the lack of competition would lead to higher grocery prices and lower wages for workers.
Kroger and Albertsons announced their planned merger in October 2022. The companies say it’s necessary so they can better compete with Walmart, Amazon and other big rivals.
The Associated Press contributed to this story.
