Albertsons taps Jim Perkins to ready SpinCo option for merger with Kroger

Albertsons Cos. has confirmed published reports that Jim Perkins, executive vice president of retail operations and special projects and Mid-Atlantic division president, will lead planning for SpinCo, a possible spin-off company to run stores divested for regulatory approval of Albertsons’ pending $24.6 billion merger deal with The Kroger Co.

Boise, Idaho-based Albertsons disclosed Perkins’ appointment to the SpinCo role in an internal memo earlier this week from Susan Morris, executive VP and chief operations officer.

When Albertsons and Kroger unveiled the merger agreement in mid-October, the companies said they expect to divest 100 to 375 stores—through direct sales to other operators and/or via a newly formed spinoff company, dubbed SpinCo—to clear the antitrust review by federal and state regulators. The pact also includes a ceiling of 650 store divestitures, at which point the companies could reassess the transaction.

Perkins’ responsibility would be to prepare for the SpinCo option, if needed. The supermarket industry veteran brings more than 40 years of experience to the role.

His grocery career began in 1982, working as a courtesy clerk at Albertsons and later rising up to the leadership ranks. Perkins served as VP of operations for Albertsons Inc. and director of operations for Albertsons LLC’s Southern division. He joined Giant Food of Maryland LLC as a regional VP and then returned to Albertsons in 2013 as president of Acme Markets in 2013. The grocery executive was appointed as executive VP of operations for the East region in April 2015; executive VP of the West region in 2016; and then came back to lead the Acme division in June 2017. That same year, in October, Perkins was named Eastern division president on top of serving as Acme president.

Later, in the fall of 2020, Perkins oversaw the acquisition of 27 Kings Food Markets and Balducci’s Food Lover’s Markets. Overall, Albertsons’ Mid-Atlantic division operates some 300 stores on the East Coast under Acme, Kings, Balducci’s and Safeway banners.

With Perkins’ shfit to the SpinCo role, Albertsons has promoted Tom Lofland to Mid-Atlantic division president. He previously was the division’s senior VP of merchandising and marketing.

Merger regulatory negotiations move forward

The Kroger-Albertsons merger—in which Kroger plans to acquire Albertsons—would form a company with annual revenue of about $210 billion and 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies, 2,015 fuel centers and 710,000 workers in 48 states and the District of Columbia.

In early December, Kroger received a second request for information from the FTC on the proposed merger. Though Kroger and Albertsons continue to expect an early 2024 completion for the deal, analysts and other industry observers say antitrust clearance likely will take longer for such a large transaction—the biggest U.S. supermarket merger ever—and could last as long as two years.

Speaking in a video interview last week with Bloomberg, Kroger Chairman and CEO Rodney McMullen said merger talks with the Federal Trade Commission are on track.

“If you look at the process itself, we are where we thought we would be,” he told Bloomberg, adding, “We always knew it would be 2024 before we expected to be able to close.”

Wall Street analysts have said Kroger and Albertsons did their legal and regulatory homework on the proposed merger, and both McMullen and Kroger Chief Financial Officer Gary Millerchip have previously said they see a clear path toward antitrust approval with store divestitures.

Kroger CFO Gary Millerchip said at this week's BMO Global Farm to Market Conference that approval talks for the merger with Albertsons are progressing. / Photos: Shutterstock.

“We’re in the process right now of talking to numerous potential buyers,” McMullen said in the Bloomberg interview. He also noted that divested stores wouldn’t go to questionable operators. “It’s going to be important for us, and from the FTC’s standpoint, to make sure we have strong, viable buyers that are incredibly good competitors but also providing great job security,” he said.

Millerchip again expressed confidence in landing regulatory approval for the Albertsons transaction in a session on Thursday at the BMO Global Farm to Market Conference in New York.

“We believe that we’ve built credibility with the regulators, and the FTC in particular,” he told BMO analyst Kelly Bania. “When you think about the mergers that Kroger has done with Roundy’s and with Harris Teeter, we can point out very specifically that we’ve improved pricing for customers. We’ve created more jobs in those markets; we’ve invested significantly in capital. So we believe we make the markets and the communities we operate in stronger by the mergers that we’ve done. So our objective is to actively work with the FTC and respect that process, to work with them through that process. We’re exactly where we’d expect to be at this point in the journey and, obviously, we knew this was a complex transaction.” (Conference transcript from AlphaSense.)

Kroger’s CFO also reiterated McMullen’s comments that divested stores wouldn’t go to just any operator.

“The process requires us to really determine who do we think are the potential buyers of stores that would need to be divested?” Millerchip said at the conference. “Because we need to be able to share that through the [regulatory] process. And our commitment is to identify buyers that will be well-capitalized, that will be well-run, that will have a commitment to the business, because we want to make sure that those stores have a successful long-term future as well.”