Kroger To Buy Harris Teeter In Approx. $2.5 Bln Transaction - Quick Facts

(RTTNews) - The Kroger Co. (KR) and Harris Teeter Supermarkets Inc. (HTSI) announced a definitive merger agreement under which Kroger will purchase all outstanding shares of Harris Teeter for $49.38 per share in cash. Kroger intends to assume Harris Teeter's outstanding debt of approximately $100 million.

Kroger will finance the transaction with debt. The company said it intends to continue quarterly dividend and share repurchase program while managing free cash flow to reduce the leverage taken on from the merger.

Including the effect of allocating some free cash flow to debt reduction, Kroger expects net accretion to earnings per diluted share in the range of $0.06-$0.09 in the first full year after the merger, excluding transition and transaction expenses. Kroger expects to maintain its current 8-11% long-term net earnings per share growth rate off of this higher earnings base.

Harris Teeter brings to Kroger 212 stores in southeastern and mid-Atlantic markets and in Washington, D.C. Harris had revenues of approximately $4.5 billion for fiscal year 2012.