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Harris Teeter set for business merger with Kroger

Kroger Co. makes a rare bid to buy Harris Teeter Supermarkets Inc. for $2.5 billion. The business merger will allow Kroger Co to enter markets that in which it has not previously had a presence. Harris Teeter doesn't have stores in New Jersey, but anyone who has been to our nation's capital may have stopped into one.

Other than small acquisitions here and there, this is the largest acquisition Kroger Co. has made since 1999. Kroger is hoping to use the knowledge that Harris Teeter has gained in the fresh food market along with its online store. The top management at Harris Teeter will continue to run the operation and there are no store closures planned. However, the U.S. Federal Trade Commission will have to review the markets of both stores to make sure there is no significant overlap.

This consolidation is the second biggest this year and illustrates the pressure that grocers are feeling from giants such as Wal-Mart and Whole Foods. Other chains such as Safeway and SuperValu have to sell off assets in order to stay in the market. Kroger has already planned how to finance the purchase and has even received a commitment for a bridge loan.

When certain business industries begin to get overshadowed by larger corporations, a business merger can often help both companies to come out from behind. New Jersey businesses that are struggling to compete with larger businesses may want to consider a merger as well. There is a lot of planning and homework to be done before a merger can be accomplished. However, once both companies have answered all of their questions and complied with whatever governmental requirements exist for that industry, the merger can take the pressure off of both companies when it comes to the question of survival.

Source: Reuters, "Kroger to buy Harris Teeter for $2.5 billion, shares rise," Lisa Baertlein and Jessica Wohl, July 9, 2013

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