What You Need to Know About the Kroger-Albertsons Merger And How Residents Of The Chicago Area React

Two of America's five largest wholesalers, Kroger and Albertsons, have agreed to join forces in a deal the two companies hope will allow them to better compete with Walmart, Amazon, and other companies that have made headway in the grocery industry. The merger is poised to affect shoppers in the Chicago area more than likely anywhere else in the country, as the area's two major local grocery chains, Jewel-Osco and Mariano's, are owned by Albertsons and Kroger, respectively.

Kroger on Friday offered $20 billion for Albertsons Companies Inc., or $34.10 per share. Kroger will also cover $4.7 billion in Albertsons debt. Kroger chairman and CEO Rodney McMullen, who will retain the title at the combined company, said the merger could save $1 billion a year in lower administrative costs, more efficient manufacturing and distribution and co-investment in technology. McMullen said the company would roll back those savings into lower prices, higher wages and better stores.

“We will take lessons from each company to bring greater value and a better experience to more customers, more partners and more communities,” McMullen said on Friday in a conference call with investors. The boards of both companies unanimously approved the agreement, which would require regulatory approval. It is expected to close in early 2024.

However, shares in both companies fell in Friday morning trade. And the merger is expected to face intense scrutiny from US antitrust regulators and local buyers -- especially at a time of high food price inflation.

Here's what we know so far about mergers.

The merger drew a strong reaction on social media from grocery shoppers in the Chicago area

"I don't see anything good coming out of this deal for us," a comment on the NBC 5 Chicago Facebook post read. "Only a higher price."

"Kroger is going to destroy Jewel right now like Mariano's?" read again.

Kroger is the second largest grocery store by market share in the United States, behind Walmart, and Albertsons is fourth, after Costco. Together, Kroger and Albertsons will be the second closer to Walmart.

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands such as Ralphs, Smith's, and Harris Teeter.

In the Chicago area, Kroger owns and operates a Mariano grocery store.

The deal, which is likely to come under intense scrutiny from U.S. antitrust regulators. -- especially at a time of high food price inflation -- has caused a stir among Chicago area grocery shoppers, many of whom still feel the sting when Chicago area chain Dominick's stores close. As a result, several long-established Dominick stores in late 2013 reopened under the Mariano name after the Milwaukee-based brand stepped in. Alberttons, based in Boise, Idaho, operates 2,220 stores in 34 states, including brands such as Jewel Osco, Shaw's and Safeway. Together the company employs approximately 710,000 people.

"Now Jewel will be dragged down," wrote one Facebook comment. "We all know where Dominick is now."

Some shoppers worry that their local grocery shopping options will be lost if the merger takes place. "Almost monopolizing the food supply," wrote a Facebook comment. "What's the worst thing that could happen?"

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