Announces Deal to Buy Giant Eagle...

Research evidence excerpt

Announces Deal to Buy Giant Eagle...

Consumer

KROGER CO. (KR) July 1, 2026

Announces Deal to Buy Giant Eagle... Rating:

OutperformKroger announced a deal to acquire Giant Eagle in a transaction that will add Price:

$9bn in sales for a purchase price of $1.65bn. The acqusition will be accretive in $55.53

Year 2 (closing in 2027) and is consistent with the management team's increased Price Target:

$86openness to do M&A. We estimate that EBIT margins are in the ~2.0-2.5% range

% Upside:

(similar to ACI) and should allow Kroger to densify while expanding into some 54.4%

adjacent markets. The combination of increased M&A and focus on price is another

signal that the business is increasingly being run more offensively. Source: FactSet, Wolfe Research

Priced as of 06/30/26

KR Paying $1.65bn For Giant Eagle That Generates $9bn in Sales. Kroger

Greg Badishkanian

announced the acquisition of Gaint Eagle, a family-owned grocer in the Mid-west, for gbadishkanian@wolferesearch.com

$1.65bn. The acquisition will be financed with $1.25bn of cash considerations and (646) 582-9340

KR will assume $400mm of outstanding liabilities. This will allow KR to maintain its View Greg’s Research

View KR Model

net total debt to adj. EBITDA ratio in the 2.3-2.5x target range. Share buybacks ($2bn View Comp Table

repurchase plan) & dividends are expected to remain on track with prior guidance.

Using grocery peers as comps we estimate that incremental EBIT contribution should Catherine Lee clee@wolferesearch.com

be in the ~$200-250mm range. (646) 582-9341

Accretive to EPS in Year 2 Some Incremental Dilution This Year. Kroger expects the Spencer Hanus

acquisition to be accretive in the second year after close as they work through one shanus@wolferesearch.com (646) 582-9344