Harris Teeter shareholders vote overwhelmingly to approve supermarket chain's sale to Kroger, which hopes to complete US$2.4B deal in Q4 of this year
October 4, 2013
– Harris Teeter shareholders voted Thursday morning to approve the supermarket chain's sale to The Kroger Co.
The overwhelming vote -- 83 percent of Harris Teeter shareholders were in favor -- moves the $2.4 billion deal one crucial step closer to completion.
A smaller majority, 72 percent, approved "golden parachute" compensation packages for Harris Teeter's top executives once the deal is complete.
CEO Thomas Dickson would be eligible for a $262,500 bonus for getting the deal done. He would also be paid another roughly $16 million in cash, stock and perks.
Federal regulators, who so far haven't objected to the deal, would still have to sign off on the acquisition, and the companies still face several shareholder suits looking to block the acquisition.
Cincinnati-based Kroger has said it hopes to complete the purchase in the fourth quarter of this year.
Matthews-based Harris Teeter's future has been in flux since February, when the company confirmed it was exploring a sale. Little was said publicly until July, when Kroger announced it would acquire Harris Teeter to gain a larger foothold in the Southeast.
At Thursday's meeting, which lasted less than 20 minutes, Dickson said Harris Teeter pursued a sale because of tightening competition in the grocery industry -- particularly from Walmart.
"The competitive landscape in the retail food industry has changed dramatically in the last 30 years," he said.
The big-box giant has used its scale to continually drive down prices on its food, pressuring margins at other stores, Dickson said. Price is the top reason people decide to switch grocery stores, he said.
Kroger, as a much larger company with nearly $100 billion in sales, is better able to keep pace with Walmart, Dickson said. Harris Teeter had about $4.5 billion in sales last year.
And by selling to Kroger, Harris Teeter will be able to keep its brand name, growth plan, distribution centers and corporate offices, he said.
Harris Teeter did not make executives available for questions from the media Thursday. Several directors approached by the Observer declined to comment.
"It's a big day. It is," director John Belk, CEO of Belk Inc., said.
A Kroger spokesman did not immediately return phone calls Thursday.