Kroger Sells its Convenience Stores to EG Group for 1.733 Million: The North American group Kroger will sell its convenience store business – stores with less than 500 square meters – to EG Group, a British retailer of self-service gas station stores, for 2.15 billion dollars (1.733 billion euros. the transaction will be completed in the first quarter of Kroger’s fiscal year, according to a statement.
Under this agreement, EG Group will establish its headquarters in Ohio (USA) and will continue to operate under its own brand, whose objective is to access the North American market. KROGER (KR.NY) announced the exploration of strategic alternatives for its convenience store business in October 2017, including its potential sale.
“As part of our regular asset review, it is clear that the strong convenience store business unit will better demonstrate its full potential outside of the group,” said Kroger Executive Vice President and Chief Financial Officer Mike Schlotman.
For his part, the founder and co-CEO of EG Group, Mohsin Issa, indicated that the company’s entry into the North American market is an “exciting” event. “We have been very successful in Europe and we strongly believe that Kroger’s assets present a fantastic basis for establishing our retail expertise and know-how in the US,” Issa said.
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With the net proceeds from the sale, Kroger plans to carry out a share buyback program and reduce its total net debt relative to its adjusted Ebitda.
Kroger’s convenience store business, which numbers about 800 stores, operates in 18 states and employs 11,000 people. This division generated revenues of 4,000 million dollars (3,224 million euros) in 2016.
The transaction is still subject to customary closing conditions, as well as approval by the competition authority. However, Kroger expects the transaction to be completed quickly as EG Group does not currently have a presence in the US. Check Krogerfeedback.pro for more updates and the latest news.