CINCINNATI (AP) - Kroger, the country's largest traditional supermarket operator, said Tuesday that it has agreed to buy Harris Teeter Supermarkets Inc . for about $2.44 billion in cash.
The deal expands Cincinnati-based Kroger's stores in the southeastern and mid-Atlantic markets and increases the number of states it operates in by three to 34.
There are 7 Kroger stores in Hampton Roads, and 12 Harris Teeter stores.
Concerned Harris Teeter shoppers asked 10 On Your Side what this will mean for them, so WAVY's Stephanie Harris did some digging.
Kroger says it has no plans to close any stores. Both chains have stores being built in Hampton Roads right now, and all of those plans will continue as scheduled, according to a Kroger spokesperson.
After the deal closes, Harris Teeter will become a Kroger subsidiary and will continue to be led by members of its current senior management. There are no plans to close stores and the company will remain based in Matthews, N.C.
Harris Teeter would not answer 10 On Your Side's question about possible changes to its coupon policy. Kroger stopped doubling coupons recently in Hampton Roads stores, but Harris Teeter does. Kroger spokesman Keith Dailey said it's too soon to say what operational decisions will be made in the future.
Under the terms of the agreement, Kroger will pay $49.38 for each of the fellow supermarket chain's shares. The price represents a two percent increase over the company's Monday closing stock price.
"This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates," Kroger Chairman and CEO David Dillon said in a statement.
The deal has been approved by both companies' boards. Harris Teeter announced in February that it was exploring strategic alternatives, including a possible sale.
Harris Teeter operates 212 stores in eight southeastern and mid-Atlantic states and Washington DC, along with a pair of distribution centers and a dairy facility in North Carolina. Its fiscal 2012 revenue totaled about $4.5 billion.
In comparison, Kroger operates 2,419 stores in 31 states. In addition to its flagship brand of supermarkets, it also owns Ralphs, Fry's and Food 4 Less.
Kroger Co. says it expects the deal to result in cost savings of $40 million to $50 million over the next three to four years. It will finance the deal with debt and plans to assume Harris Teeter's outstanding debt of about $100 million.
In premarket trading, Harris Teeter shares edged up 42 cents to $48.95, while Kroger shares rose 37 cents to $36.56.
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