CINCINNATI -- Stockholders of The Kroger Co. and Dillon Companies Inc. gave Tuesday overwhelmingly approved the merger of the two supermarket chains that gives Kroger a sought-after presence in the western Untied States.
Kroger, the nation's second-largest supermarket chain that operates 1,199 supermarkets and 563 drug stores in 19 midwestern and southern states, sought the merger in order to expand to the western United States.
Kroger Chairman Lyle Everingham termed the agreement 'an important step in reducing Kroger's dependence on the industrial Midwest.'
Dillon operates 219 supermarkets and 350 convenience stores in 12 states west of the Mississippi River. Under terms of the merger it becomes the Dillon division of Kroger.
The merger required approval by at least two-thirds of the outstanding shares of Dillon stock. Holders of 84.6 percent of Dillon stock voted for the merger. Approval by a majority of Kroger stockholders also was needed, and 98.1 percent of Kroger shareholders approved the deal.
'We are pleased that our shareowners agree so strongly that this merger will benefit both companies, our shareowners and our customers,' said Everingham. 'We believe the combination of our two companies will result in a stronger, more efficient and more profitable enterprise than each company could have attained separately.'
At the Kroger meeting, shareowners approved the issuance of up to 16.7 million shares of common stock to be issued in exchange for Dillon shares at a ratio of .8539 share of Kroger common for each Dillon common share.
Kroger stockholders also agreed to increase the number of common stock shares from 50 million to 125 million.
Kroger, headquartered in Cincinnati, had sales of $11.2 billion and net earnings of $128 million in fiscal 1981.
Dillon, headquartered in Hutchinson, Kan., had sales of $2.8 billion and net earnings of $50 million in fiscal 1982.