Mariano’s parent company has agreed to be bought by grocery giant Kroger Co. in an $800 million deal.
Kroger said buying Roundy’s Inc. will extend its footprint into several new markets in Wisconsin and expand its presence in Chicago.
Roundy’s will operate its 151 stores as a subsidiary of Kroger, and key members of Roundy’s senior management — including chairman, president and CEO Robert Mariano — will remain in place. No store closings are planned. Roundy’s headquarters will remain in Milwaukee.
The company has 34 Mariano’s stores in the Chicago area with five more expected to open in 2016.
“As far as operations of the stores, customers are not going to see any changes. The same people will be there,” Mariano said in an interview Wednesday.
Mariano said any further expansion of the Mariano’s brand will be discussed as the Kroger deal nears completion. “There’s more work that our teams have to do on that,” he said. “The reality of it is, we would do that every two to four years anyway.”
Mariano said Kroger initiated merger talks.
“I have a lot of admiration for what Kroger does,” he said. “They put customers first the way we do. … From a culture perspective, we’re very aligned.”
Roundy’s has 151 stores and 101 pharmacies in Wisconsin and Illinois. In addition to Mariano’s, the company operates groceries under the Pick ‘n Save, Copps and Metro Market banners. Roundy’s had sales of nearly $4.0 billion for fiscal year 2014.
Kroger chairman and CEO Rodney McMullen singled out the Mariano’s stores in statements about the proposed merger.
“We admire what Bob Mariano has done with the Mariano’s banner in Chicago, where he has created an urban format that is resonating with customers and we expect to apply Roundy’s experience to our stores in urban areas around the country,” McMullen said in a news release.
“Kroger’s scale and strong financial position will enable Roundy’s to reinvest in its home state of Wisconsin while continuing to grow in Chicago.”
Kroger operates more than 2,600 stores in 34 states. It owns several supermarket chains, including City Market, Ralphs and Harris Teeter.
Kroger is paying about $178 million, or $3.60 per share, which is about 65 percent higher than Roundy’s closing stock price Tuesday. Kroger valued the deal at $800 million, including assumption of debt.
The deal is expected to close before the end of the year, although Roundy’s has an option to find another buyer within 30 days.
Contributing: The Associated Press