Kroger has agreed to acquire Giant Eagle, a regional food and pharmacy retailer, in a deal valued at $1.65 billion in cash and assumed liabilities. The transaction, which has received approval from Kroger’s board, is expected to close sometime next year.

Kroger, the largest grocery chain in the United States by sales after Walmart, operates over 1,200 stores across 16 states. The company anticipates the acquisition will contribute to adjusted earnings per share starting in the second full year after the deal closes, excluding transaction and integration expenses.

Giant Eagle, founded in 1931 and privately held, operates approximately 200 supermarkets across western Pennsylvania, north central Ohio, northern West Virginia, Maryland, and Indiana. The company also manages 11 standalone pharmacies and generates about $9 billion in annual sales.

Kroger Chief Executive Greg Foran emphasized the strategic alignment of the acquisition, noting Giant Eagle’s strong reputation for fresh products, pharmacy services, private-label brands, and customer loyalty. "We evaluated the opportunity carefully, and the strategic fit is clear," Foran said.

The companies anticipate making limited store divestitures as part of the regulatory approval process. Kroger’s shares rose 1.3% to close at $56.24 following the announcement. The transaction underscores Kroger’s ongoing focus on capital allocation and growth through acquisitions.