Kroger has announced it intends to acquire the supermarket chain Giant Eagle for $1.65 billion in a move that would greatly increase its control of the Midwest grocery market.

The final deal will see Kroger spend $1.25 billion in cash alongside the assumption of $400 million in outstanding liabilities.

Giant Eagle operates 197 supermarkets and 11 standalone pharmacies across Indiana, Maryland, Ohio, western Pennsylvania, and West Virginia. Together, they generate approximately $9 billion in annual sales.

The transaction is expected to close in 2027, subject to regulatory approval. Kroger said it expects to make “limited Giant Eagle store divestitures” in the process.

Greg Foran, chief executive at Kroger, said: "Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty.

"We evaluated the opportunity carefully, and the strategic fit is clear. Giant Eagle expands our reach into attractive adjacent markets, allowing us to do what we do best: run outstanding stores, deliver fresh foods and convenient meal solutions at affordable prices, and take care of our customers and associates every single day."

A source close to the acquisition told Reuters that Giant Eagle did not run an auction, choosing instead to engage with Kroger directly.

Kroger’s last major acquisition attempt was its failed 2022 bid to purchase rival Albertsons for $24.6 billion. The merger would have created one of the largest grocery store chains in the US but was set back by lawsuits from the state of Washington and the attorney general of Colorado.

The Federal Trade Commission filed its own lawsuit to block the deal in February 2024, citing antitrust concerns. Albertsons eventually pulled out of the deal on 11 December 2024 after a district court judge and a supreme court judge issued injunctions against the merger.

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