Kroger and Albertsons have amended their store divestiture plan and agreed to sell 166 additional stores to C&S Wholesale Grocers.
This move aims to address antitrust concerns and secure regulatory approval for their proposed $25bn merger.
The expanded divestiture package includes the sale of the QFC, Mariano's, Carrs, and now the Haggen banner names to C&S. The total number of stores to be sold to C&S now stands at 579.
Kroger will rebrand retained stores under its own or Albertsons banners post-transaction.
In addition, the amended package expands the corporate and office infrastructure provided to C&S to ensure that the divested stores are operated competitively and cohesively.
As part of the updated plan, C&S will pay approximately $2.9bn in cash for the stores, an increase from the initial $1.9bn.
The deal also involves licensing agreements for certain Albertsons and Safeway banners across four states including California, Wyoming, Arizona and Colorado.
Kroger will rebrand retained stores in these locations after the transaction.
The company expects the enhanced plan to extend a competitor to new geographies and prevent store closure due to the merger.
The divesture to C&S is subject to fulfilment of customary closing conditions, including Federal Trade Commission (FTC) and/or other governmental clearance, and the closure of The Kroger-Albertsons merger.
Kroger chairman and CEO Rodney McMullen said: "We have reached an agreement with C&S for an updated divestiture package that maintains Kroger's commitments to customers, associates and communities, addresses concerns raised by regulators, and will further ensure that C&S can successfully operate the divested stores as they are operated today.
"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 healthcare 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 unionised grocery jobs."
Kroger and Albertsons entered into an agreement for the deal in October 2022.
However, the deal faced opposition from various lawmakers and consumer groups, who fear it could reduce competition in the US grocery market.
In February this year, US competition officials at the FTC sought to block the merger between Kroger and Albertsons.
Last month, the FTC request for a preliminary injunction to halt supermarket chain Kroger‘s proposed acquisition of competitor Albertsons was set for trial on 26 August 2024.
