KROGER TO BUY MICHIGAN'S KESSEL FOOD MARKETS

DAVID ORGEL

CINCINNATI -- Kroger Co. here said it has reached an agreement to purchase Flint, Michigan-based Kessel Food Markets, a family operation with stores primarily in Flint and Saginaw, Michigan.

The transaction, which includes 20 stores, opens new markets for the Livonia-based Michigan Kroger Marketing Area, which currently does not have operations in Flint or Saginaw, Gary Rhodes, spokesman, told SN.

"Kroger will be able to expand its customer base," he said. "The company can leverage purchasing, merchandising, advertising and information systems operations over a larger store base."

The deal would increase the KMA's store count to 105. Four stores owned by Kessel are not part of the deal because they are smaller than the others.

The acquired stores would continue to operate under the Kessel banner, which has "strong brand recognition and brand equity," Rhodes said.

The transaction is expected to be completed by early next year. Terms were not announced.

Kroger plans to remodel many of the acquired stores gradually, according to Marnette Perry, president of the Michigan KMA.

Al Kessel, chairman and founder of Kessel, said the decision to sell the family operation will boost the growth opportunities for his company because of multiple synergies between aquirer and aquiree.