Even though two lawsuits are pending against the merger, Harris Teeter (NYSE: HTSI) shareholders approved the sale of the Matthews, N.C.-based grocery chain to The Kroger Co. (NYSE: KR) on Thursday (October 3).
83 percent of Harris Teeter shareholders voted in favor of the deal at a special meeting. At the meeting, Harris Teeter CEO Thomas Dickson said the grocery industry's competitive landscape and the benefits of scale were the two primary reasons behind the merger.
Dickson said it is difficult to compete against larger competitors such as Walmart Stores (NYSE: WMT) and Lakeland, Fla.-based Publix Super Markets, which has plans for several new stores in North Carolina and South Carolina, Harris Teeter's operating area.
Kroger announced its intention to acquire Harris Teeter for around $2.5 billion in July, including the assumption of $100 million in debt. Kroger operates more than 2,400 grocery stores in 31 states, while Harris Teeter has 216 stores in eight states.
Under the terms of the merger agreement, Harris Teeter shareholders will receive $49.38 per share in cash for each share of Harris Teeter common stock. Upon closing of the transaction, Harris Teeter's common stock will no longer be publicly traded and Harris Teeter will be a wholly-owned subsidiary of Kroger.
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