The acquisition of Kroger’s convenience store business complements EG Group’s European platform
EG Group has signed a definitive agreement with The Kroger Co., setting convenience retail fuel expansion plans in the United States. EG Group will purchase Kroger’s 762 stores for a consideration of $2.15 billion. Operating in 18 states including 66 franchise operations, Kroger’s convenience store business employs 11,000 associates and generated revenue of $4 billion, including selling 1.2 billion gallons of fuel, in 2016.EG Group, as part of the transaction, will establish their North American headquarters in Cincinnati, Ohio and continue to operate stores under their established banner names.
The business, as announced in late 2017, secured approximately 1,000 fuel service station assets from Esso in Germany which will be transferred and integrated into the existing network in Q4, 2018. EG Group, with the inclusion of the Kroger assets, will own and operate approximately 4,400 fuel service stations across Europe and the US.
“This is an exciting time for EG Group, the entry into the US market presents a fantastic opportunity to deliver a successful retail offer to consumers across the various states,” said Mohsin Issa, EG Group Founder and co-CEO.“We have had much success across Europe and we firmly believe the Kroger assets present a fantastic foundation to overlay our retail experience and know-how in the US.
Zuber Issa, EG Group Founder and co-CEO, said “Our business model is simple but effective – EG Group is creating a stronger relationship between consumers and leading retail brands they want to access. In the US we aim to create a retail environment which delivers convenience, provides value and serves as a retail destination offering excellent welfare to motorists who live and work near our convenience retail stores.”
Mike Schlotman, Kroger’s executive vice president and chief financial officer said, “One of the most important considerations in our decision-making process was to enable continued operations to ensure minimal disruption to our associates. We are very pleased the EG Group plans to establish their North American headquarters in Cincinnati. EG Group is a recognized international retail fuel convenience operator and they have a commercial model which clearly looks to enhance the consumer offer by working with leading retail brands customers know and trust.” PWKD07022018