Kroger has entered into a pending merger acquisition agreement with Home Chef, a private meal kit company.
The initial transaction price is $200 million and future earnout payments of up to $500 million over five years, which are contingent on achieving certain milestones, including growth of in-store and online meal kit sales, the company said.
“Customers want convenience, simplicity and a personalized food experience. Bringing Home Chef’s innovative and exciting products and services to Kroger’s customers will help make meal planning even easier and mealtime more delicious,” said Yael Cosset, Kroger’s chief digital officer. “This merger will introduce Kroger’s shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger.”
“We’ve long believed that the future of our industry is omnichannel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable,” said Pat Vihtelic, Home Chef’s founder and CEO.
After the deal closes, which is expected in the second quarter pending regulatory approval, Home Chef will operate as a subsidiary of Kroger, maintain its e-commerce business, and assume responsibility for Kroger’s meal solutions portfolio. The company will continue to operate its offices and facilities. Following closing, Kroger will make Home Chef meal kits available to Kroger shoppers, both in stores and online.