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EG Group to buy Kroger’s convenience store business for $2.15bn

Published 06 February 2018

UK-based petrol forecourt convenience store retailer EG Group has agreed to acquire Kroger’s convenience store business unit for $2.15bn.

The deal is expected to close in the first quarter of Kroger’s fiscal year.

As part of the agreement, EG Group will set up its North American headquarters in Cincinnati, Ohio and will continue to operate stores under their established banner names.

Kroger has convenience stores across 18 states and 66 franchise operations. Its stores employ about 11,000 associates and operate under the banner names Turkey Hill, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quik Stop.

In 2016, Kroger’s convenience stores are said to have generated about $4bn and it includes 1.2 billion gallons of fuel. The company’s supermarket fuel centers and its Turkey Hill Dairy are not included in the sale.

Last year, Kroger stated that it intends to explore alternatives for its convenience store business including sale, in conjunction with Restock Kroger.

Kroger's executive vice president and chief financial officer Mike Schlotman said: "Our convenience store business has been a part of our company for many years. We want to thank our management team and associates for their enduring commitment to our customers, and for the contributions they have made to build our supermarket fuel business.

"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."

Schlotman also stated that EG Group is a recognized international petrol forecourt convenience operator and it has a commercial model which seeks to improve the consumer offer by working with retail brands customers know and trust,

EG Group founder and 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."

Image: Kroger headquarters building in Cincinnati. Photo: Courtesy of Derek Jensen (Tysto)/Wikimedia Commons.