Food retailer Kroger Co. announced on Tuesday a merger agreement to buy Harris Teeter Supermarkets Inc. for about $2.5 billion.
The merger will create an entity with a combined $8.1 billion of retirement assets — $5.1 billion in defined contribution assets and $3 billion in defined benefit plan assets.
According to 11-K filings, Kroger had about $4.6 billion total in three DC plans as of Dec. 31. Harris Teeter's DC assets stood at $534 million in its retirement and savings plan as of Dec. 31.
Kroger had $2.75 billion in defined benefit assets as of Feb 2 — the company's fiscal year-end date — with a funding ratio of 79.8%. Harris Teeter's DB assets were $286.5 million as of Oct. 2 — its fiscal year-end — with a funding ratio of 81.9%.
Kroger contributed $492 million total to at least 18 multiemployer pension plans in 2012.
Jason DeRise, an analyst at UBS AG, said in a research note that Harris Teeter has “strong brand equity, has a loyal high-income shopper base, highly invested stores, no union, no debt, no pension issues.”
Neither firm responded to requests for further information by press time.
