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UK-based petrol forecourt convenience retailer EG Group has today reached a deal to acquire Kroger’s convenience store business for $2.15 billion.
Kroger had announced last October that it was considering selling the unit that spans 18 states and includes QuickStop and KwikShop.
The business employs 11,000 people and in 2016 it generated revenue of $4 billion. Kroger’s supermarket fuel centres and its Turkey Hill Dairy are not included in the sale.
Kroger said it plans to use net proceeds from the sale to repurchase shares and to lower its net total debt to adjusted EBITDA ratio.
Founded in 2001 by brothers Zuber and Mohsin Issa, EG Group employs 12,500 staff working over 2,600 sites in countries such as the UK, France, Holland, Belgium, Luxembourg and Italy. Last year, it secured around 1,000 petrol forecourt assets from Esso in Germany.
Following completion of the Kroger deal, EG Group will establish its North American headquarters in Cincinnati, Ohio, and continue to operate stores under their established banner names.
Kroger chief financial officer Mike Schlotman said: “As part of our regular review of assets, it has become clear that our strong convenience store business unit will better meet its full potential outside of our business.
“One of the most important considerations in our decision-making process was continued operations to ensure minimal disruption to our associates. We are very pleased the EG Group plans to establish their North American headquarters in Cincinnati. EG Group is also a recognised international petrol forecourt convenience operator and they have a commercial model which clearly looks to enhance the consumer offer by working with leading retail brands customers know and trust.
“This is good for our associates across the country and for our headquarter city of Cincinnati. Throughout the process we were impressed with the EG Group’s professionalism, investment commitment and more importantly their understanding of the US convenience retail market. We now look forward to working with them closely to ensure a smooth transition for associates.”
EG Group co-CEO Mohsin Issa said: “This is an exciting time for EG Group, the entry into the US market presents a fantastic opportunity to deliver a successful retail offer to consumers across the various states. We have had much success across Europe and we firmly believe the Kroger assets present a fantastic foundation to overlay our retail experience and know-how in the US.
“We are committed to investing in the Kroger network, partnering with leading retail brands and working with the exceptional management team and associates transferring across to deliver a comprehensive retail offer.”
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