Kroger Stock Rises as Buybacks Resume Following Albertsons Merger Collapse
Kroger (KR) shares climbed Thursday morning, gaining about 3%, after the grocery giant announced the termination of its merger with Albertsons (ACI) and unveiled a $7.5 billion stock buyback plan.
The buyback plan, which replaces a previous $1 billion program, comes after Kroger paused stock repurchases in October 2022 while preparing for the now-canceled merger. Kroger plans to accelerate the buyback program by repurchasing $5 billion in shares immediately.
Albertsons, which also ended the merger agreement, has filed a lawsuit seeking $600 million in termination fees and additional damages, accusing Kroger of not addressing regulatory concerns. Kroger responded by calling the lawsuit "baseless" and alleging that Albertsons breached the merger agreement during negotiations.
The fallout from the failed merger hasn’t dampened investor sentiment toward Kroger, which also reaffirmed its focus on lower prices, employee wages, and other strategic priorities. Additional details on its long-term plans will be shared at its investor day in spring 2025.
The stock is now up roughly 38% year-to-date, buoyed by confidence in its future strategy despite the collapse of the merger.
Kroger (KR) shares climbed Thursday morning, gaining about 3%, after the grocery giant announced the termination of its merger with Albertsons (ACI) and unveiled a $7.5 billion stock buyback plan.
The buyback plan, which replaces a previous $1 billion program, comes after Kroger paused stock repurchases in October 2022 while preparing for the now-canceled merger. Kroger plans to accelerate the buyback program by repurchasing $5 billion in shares immediately.
Albertsons, which also ended the merger agreement, has filed a lawsuit seeking $600 million in termination fees and additional damages, accusing Kroger of not addressing regulatory concerns. Kroger responded by calling the lawsuit "baseless" and alleging that Albertsons breached the merger agreement during negotiations.
The fallout from the failed merger hasn’t dampened investor sentiment toward Kroger, which also reaffirmed its focus on lower prices, employee wages, and other strategic priorities. Additional details on its long-term plans will be shared at its investor day in spring 2025.
The stock is now up roughly 38% year-to-date, buoyed by confidence in its future strategy despite the collapse of the merger.