USA – Kroger, the American retailing company has announced that it has completed the sale of its convenience store unit to the UK based fuel stop and convenience store retailer, EG Group.
The transaction includes 762 convenience stores operating under the Turkey Hill, Loaf ‘N Jug, KwikShop, Tom Thumb and QuikStop brands, including 66 franchise operations operating in 18 states.
The sale bid, announced in October 2017, does not however include Kroger’s supermarket fuel centers and its Turkey Hill Dairy.
In February this year, Kroger announced it had agreed a deal to sale its convenience store business to EG Group with plans to use the net proceeds from the transaction for repurchase of shares and lower its net total debt.
This includes US$1.2 billion to fund an accelerated share repurchase programme as authorized by the board of directors.
The US$1.2 billion stock buyback comes in addition to the US$1 billion share repurchase program announced in March.
“Throughout the sales process, we have been impressed with EG Group’s professionalism, commitment to people, and understanding of the US convenience retail market.
I can’t stress enough how important to our success Kroger’s convenience store management and associates have been, and we want to thank them for all of their contributions to our customers and our company,” said Mike Schlotman, Kroger’s executive vice-president and chief financial officer.
Following the acquisition, EG Group plans to establish its North American headquarters in Cincinnati, Ohio, a move that Mike Schlotman indicated was good for their associates across the country and will enhance the consumer offer by working with leading retail brands.
For EG Group, the purchase is significant as it marks its entry into the US market, allowing it to operate the convenience stores under their current banners.
According to the group, the acquisition creates an opportunity to secure further assets in North America by leveraging its current retail brand partners.
It has established a strong retail ground through partnerships with global brands as Esso, BP, Shell, Carrefour, Louis Delhaize, SPAR, Starbucks, Burger King, KFC, Greggs and Subway.