Composite image of Kroger and Albertsons stores. Kroger image credit: Kevin Chen Images / Shutterstock.com; Albertsons image credit: Tada Images / Shutterstock.com

Kroger and Albertsons are the subject of widespread talk over a merger of the US retail giants.

Media reports were awash with speculation overnight. Bloomberg, citing people familiar with the matter, said Kroger is in talks with its fellow grocery retailer about a cash-and-stock merger valuing Albertsons at circa US$25bn. A deal could be imminent, the US-headquartered news agency reported, yet noting no decisions have been made and discussions could falter.

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Reuters, meanwhile, also flagged a potential deal, quoting its own sources. And CNBC said an agreement could be struck as soon as today (14 October).

Kroger is the second-largest grocery chain in the US behind Walmart in terms of market share, while Albertsons is reportedly ranked fourth.

The most recent financial results for Kroger – the second quarter to 13 August – show sales of $34.6bn and net earnings attributable to the grocer of $731m. In 2021, they stood at $137.9bn and $1.66bn, respectively.

Albertsons latest results are for the first quarter to 18 June, with sales of $23.3bn and net income of $484.2m. In the previous fiscal year, sales amounted to $71.9bn and net profit was $1.62bn.

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Just Food has approached Kroger and Albertsons for comment on a potential combination.

A tie-up would be among the largest US retail transactions in the last decade. It would be the biggest US supermarket deal since the last time Albertsons changed hands in 2006, when it was bought by Supervalu, CVS Health Corp., and a group of investment firms for about $9.8bn, Bloomberg reported.

Either notable M&A deals in US food retail in recent years include Amazon’s move for Whole Foods Market in 2017.