CINCINNATI— The Kroger Company announced Friday it has completed the sale of its convenience store business unit to EG Group for $2.15 billion, according to a media release.
After tax proceeds total $1.7 billion. $1.2 billion of the proceeds will be used to fund an accelerated share repurchase (“ASR”) program.
“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 executive vice president and 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.”
Kroger announced in October 2017 its intention to explore strategic alternatives for its convenience store business, including a potential sale, in conjunction with Restock Kroger. In February, Kroger and EG Group announced a definitive agreement for the sale of Kroger’s convenience store business unit to EG Group.
Included in the sale were 762 convenience stores, including 66 franchise operations, operating in 18 states and employing 11,000 associates under the following banner names: Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop.
Kroger’s supermarket fuel centers and its Turkey Hill Dairy were not included in the sale. EG Group will establish their North American headquarters in Cincinnati, Ohio and continue to operate stores under their established banner names.
There will be several changes in the fuel rewards program and other perks from Kwik Shops. The first is that customers will no longer be able to accumulate fuel points on Kwik Shop purchases. Customers will still be able to get the fuel discounts from their Plus Shopper’s Card. The Coffee Club, and other similar perks from Kwik Shop, will no longer be available.