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Kroger To Sell Convenience Store Business To EG Group For $2.15 Bln

Kroger Co. (KR) said Monday that it agreed to sell its convenience store business to EG Group, a privately-held petrol forecourt convenience store retailer based in Blackburn, Lancashire, United Kingdom, for $2.15 billion. The companies expect to close the transaction during the first quarter of Kroger's fiscal year.

As part of the agreement, EG Group will establish their North American headquarters in Cincinnati, Ohio and continue to operate stores under their established banner names.

Kroger announced in October 2017 its intention to explore strategic alternatives for its convenience store business, including a potential sale, in conjunction with Restock Kroger.

Kroger said today that it plans to use net proceeds from the sale to repurchase shares and to lower its net total debt to adjusted EBITDA ratio.

Kroger's convenience store business operates in 18 states. It includes 66 franchise operations. The stores employ 11,000 associates and operate under the following banner names: Turkey Hill, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quik Stop. Kroger's convenience store business generated revenue of $4 billion, including selling 1.2 billion gallons of fuel, in 2016.

Kroger's supermarket fuel centers and its Turkey Hill Dairy are not included in the sale.

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