Kroger has completed the sale of its convenience store business unit to EG Group for $2.15 billion.
The company said that after tax proceeds from the sale were $1.7 billion, adding that $1.2 billion of that total would fund an accelerated share repurchase program.
In October, Kroger announced its intention to explore strategic alternatives for its convenience store business, in conjunction with its Restock Kroger strategic plan. In February, Kroger and EG Group formed a definitive agreement that would shift ownership of the convenience store business unit to EG Group.
The sale covers 762 convenience stores, including 66 franchise operations, operating in 18 U.S. states and employing 11,000 workers under the banners Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop. The sale did not include Kroger’s supermarket fuel centers or its Turkey Hill Dairy. EG Group will establish a North American headquarters in Cincinnati, where Kroger is based, and will continue to operate stores under the established banner names. The EG Group is based in the United Kingdom.
“Throughout the sales process, we have been impressed with EG Group’s professionalism, commitment to people, and understanding of the U.S. convenience retail market,” said Mike Schlotman, Kroger’s evp/chief financial officer. “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.”