By Freddy Sebastian
Kroger agreed to acquire food and pharmacy retailer Giant Eagle for $1.65 billion in cash and assumed liabilities.
The grocer on Wednesday said its board has already approved the deal.
Kroger said it expects the deal to add to adjusted earnings per share in the second full year after closing, before transaction and integration costs. The acquisition is slated to close sometime next year.
Kroger said the deal is consistent with its approach to capital allocation and its focus on acquisitions.
"Giant Eagle is a well-run, high-quality regional grocer with a strong reputation for fresh products, pharmacy, private label and customer loyalty," Kroger Chief Executive Greg Foran said. "We evaluated the opportunity carefully, and the strategic fit is clear."
Kroger and Giant Eagle expect to make limited Giant Eagle store divestitures in connection with obtaining the requisite regulatory clearance.
Giant Eagle is privately owned and was founded in 1931 and has nearly 200 supermarkets throughout western Pennsylvania, north central Ohio, northern West Virginia, Maryland, and Indiana.
The retailer also has 11 standalone pharmacies and has about $9 billion in annual sales.
Write to Freddy Sebastian at freddy.sebastian@wsj.com