Kroger will sell nearly 800 convenience stores to British gas station operator EG Group for $2.15 billion, the U.S. supermarket chain said on Monday, as it sharpens focus on its mainstay grocery business amid a brutal price war.
Kroger said it plans to use proceeds from the sale to buy back shares and lower debt.
The sale is part of Cincinnati-based Kroger’s “Re-stock” plan that aims to revamp its nearly 2,800 brick-and-mortar supermarkets, cut prices and boost in-store technology.
Kroger is also investing in online channels amid stiff competition from chief rival Walmart, discounters Lidl and Aldi, and Whole Foods, which is owned by Amazon.com.
Kroger’s convenience stores business that includes Turkey Hill, Loaf ‘N Jug, Kwik Shop, and Tom Thumb, had annual revenue of $4 billion.
Its supermarket fuel centers and Turkey Hill Dairy are not part of the sale. Kroger said in October it was looking for buyers for its convenience stores business.
Goldman Sachs was Kroger’s financial adviser, while Morgan Stanley, Bank of America/Merrill Lynch and Barclays advised EG.