Grocery chain Kroger said Tuesday it is buying Harris Teeter Supermarkets in a $2.5 billion cash deal that will expand Kroger's presence in the mid-Atlantic and southeastern U.S.
Harris Teeter shares were up 1.4 percent to $49.22 in morning trading, and shares of Kroger jumped 2.2 percent to $36.98, indicating investor support for the deal.
North Carolina-based Harris Teeter had about $4.5 billion in revenue for fiscal 2012, and has 212 stores in "attractive, high-growth" markets. The stores aren't likely to need any remodeling or upgrading.
"This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates," Kroger Chairman and CEO David Dillon said in a statement.
Harris Teeter CEO Thomas Dickson called Kroger "one of the best food retailers in the U.S." and said the company's plans for growth will continue after the merger.
With Harris Teeter’s stores, Kroger will have 2,631 supermarkets and more than 368,300 employees across 34 states and Washington, D.C. There are no plans to close any stores, and Kroger plans to keep the Harris Teeter brand name. Cincinnati-based Kroger is second to Wal-Mart in U.S. retail sales, though it operates under multiple regional brand names.