The Kroger Company said on Tuesday that it would acquire Harris Teeter Supermarkets Inc. for $2.4 billion as it seeks to expand in the Southeast and mid-Atlantic region.
Kroger agreed to pay $49.38 a share in cash, a premium of about 2 percent to Harris Teeter’s closing price on Monday.
Harris Teeter has 212 stores in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia. The company also operates distribution centers for grocery, frozen and perishable foods in North Carolina. Harris Teeter posted $4.5 billion in revenue for the 2012 fiscal year.
Kroger said it would finance the transaction with debt and assume Harris Teeter’s outstanding debt of about $100 million. Harris Teeter will continue to operate its stores as a subsidiary of Kroger and will continue to be led by Harris Teeter’s senior management team. There are no plans to close stores.
“This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates,†David B. Dillon, Kroger’s chairman and chief executive, said in a statement. “Harris Teeter is an exceptional company with a great brand, friendly and talented associates, and attractive store formats in vibrant markets run by a first-class management team.â€
Thomas W. Dickson, the chairman and chief executive of Harris Teeter, said, “Harris Teeter has a long track record of creating shareholder value and this merger is the culmination of those efforts over many years.â€
Bank of America Merrill Lynch advised Kroger and Arnold & Porter served as legal adviser. J.P. Morgan Securities advised Harris Teeter, and McGuireWoods was its legal adviser.
