Kroger Agrees to Buy Grocer Harris Teeter for $2.5B

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July 9 (Bloomberg) -- Kroger, the largest U.S. grocery-store chain, agreed to buy Harris Teeter Supermarkets for $2.5 billion in cash to bolster its presence in the southeastern part of the country. Julie Hyman reports on Bloomberg Television's "Money Moves." (Source: Bloomberg)

What is kroger's strategy, to increase their presence?

Guess, mid-atlantic and southeast region.

The other thing is fresh fruit.

That is something harris teeter excels at, and i want to adopt some of that.

We talked about the reason behind the acquisition.

Of the harris teeter brand is a chain of stores that we have been mired.

They bring greater focus on fresh product and prepared foods to the organization.

This is something that we can leverage across our entire chain.

It gives us entry into some dynamic, fast-growing markets, charlotte, north carolina, washington, d.c., boston, and just to name a few.

So there is the geographic exposure, and also annual savings of $60 million over the next before your years, that kroger " to achieve.

Is it possible that another bidder may step into the fray?

The price is set a 34% premium to where the shares were before harris teeter said that it was exploring various alternatives for the company.

So you have a relatively steep premium.

Also, multiple times heated up.

The highest multiple we have seen for deals in this industry.

-- multiple times ebitda.

We have had some analysts say you could get a public to come in here, you could get someone to get in here, but investors to bear will be a higher bid.

Earlier we saw a few trades above the offer price, but since then the stock has stabilized right at the offer price.

You also have to consider the $75 million breakup fee, as well as a prohibition on harris teeter for solicitation of other bids.

It is not allowed to shop itself.

If someone wants to make a bid, that has to happen on its own.

Thank you, julie hyman.

This text has been automatically generated. It may not be 100% accurate.


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