Kroger Co.'s $13.5 billion acquisition of Fred Meyer Inc. got a thumbs up from the Federal Trade Commission Thursday, the last hurdle that had to be cleared in creating the nation's largest grocery store chain.
Under terms of an antitrust agreement worked out between the FTC and the two companies, one store in Utah -- City Market in Price -- and three Smith's Food & Drug centers -- two in Cheyenne, Wyo., and one in Sierra Vista, Ariz. -- will have to be sold off. Another four stores that need to be sold are also in Wyoming and Arizona.The store in Price will be sold to Albertson's Inc., the Boise-based supermarket chain that is expected to close its buyout of Utah-based American Stores by June 30. When it was announced last August, that deal would have created the largest supermarket chain. Now, it will be relegated to second place. That merger is valued at $11.7 billion.
Cincinnati-based Kroger is already the nation's largest grocer with $28.2 billion in sales last year. Fred Meyer, based in Portland, Ore., is farther down the list with $14.9 billion in annual sales.
Fred Meyer acquired Salt Lake-based Smith's in 1997 in a $1.95 billion stock swap that converted thousands of Utahns who owned stock in Smith's into Fred Meyer shareholders.
Both Kroger and Fred Meyer shareholders approved their companies' merger last month.
Between them, Kroger and Fred Meyer have more than 300,000 employees, 2,200 supermarkets, 800 convenience stores and 381 jewelry stores. Combined sales of $43.1 billion would account for 10 percent of all U.S. grocery sales.
Fred Meyer will keep its headquarters in Portland, Ore., retain its name and operate as a unit of Kroger.
In addition to the $8 billion it is paying Fred Meyer shareholders, Kroger is assuming about $4.8 billion in debt.
Joseph A. Pichler, Kroger's chief executive and chairman, is to retain those titles with the combined company. Ronald W. Burkle, Fred Meyer's chairman, will become chairman of the executive committee of Kroger's board.
The Associated Press contributed to this report.