CINCINNATI — The Kroger Co. is acquiring Albertsons Companies for approximately $24.6 billion. If the acquisition is approved, it will encompass 4,996 stores, 52 processing plants, 66 distribution centers, employ approximately 710,000, and, on a combined basis have an estimated $210 billion in sales and $3.3 billion in earnings.

“Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores,” said Rodney McMullen, chairman and chief executive officer of Kroger and who will continue in that role once the deal is complete.

Albertsons board of directors announced it was putting the business under strategic review this past February and said all paths to maximizing value creation would be considered. In fiscal 2021, ended Feb. 26, 2022, the company earned $1.6 billion, equal to $2.73 per share on the common stock, up 88% from $850 million, equal to $1.53 per share, the year before.

Fiscal 2021 sales were $71.9 billion, up 2.7% from $70 billion in fiscal 2020. Banners owned and operated by the company include Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Market and Balducci’s.

“We have been on a transformational journey to evolve Albertsons Cos. into a modern and efficient omnichannel food and drug retailer focused on building deep and lasting relationships with our customers and communities,” said Vivek Sankaran, CEO of Albertsons. “I am proud of what our 290,000 associates have accomplished, delivering top-tier performance while furthering our purpose to bring people together around the joys of food and to inspire well-being. Today’s announcement is a testament to their success.”

Once combined, the business is expected to achieve approximately $1 billion of annual run-rate synergies net of divestitures within the first four years of combined operations with approximately 50% being achieved within the first two years following the close, according to Kroger. The synergies largely will be through improved sourcing, optimization of manufacturing and distribution networks, and technology investment amplification opportunities.

In the expectation of pushback to the acquisition from antitrust authorities, the companies also said they will create SpinCo to divest some stores. SpinCo is estimated to comprise between 100 and 375 stores and was described by Kroger and Albertsons as a “new, agile competitor.”

The transaction is expected to close in early 2024, subject to regulatory clearance and other closing conditions.