Kroger's Expanding Empire: Is This Warren Buffett Stock a No-Brainer Buy?

The biggest grocery store chain in the country is about to get a whole lot bigger. Kroger (NYSE: KR) will be acquiring the second-biggest stand-alone chain, Albertsons (NYSE: ACI), in a $24.6 billion deal that will create a massive supermarket giant.

The combined company will generate $210 billion in annual sales and have around 5,000 stores and 700,000 employees, which will put it within striking distance of Walmart. Yet because it will also lessen competition in some markets, as Kroger and Albertsons have overlapping geographic sprawl, it's likely this merger will get close antitrust scrutiny, and will probably result in asset sales.

Warren Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) owns a 7.3% stake in Kroger's worth some $2.26 billion dollars. Let's see if it's worthwhile for investors to buy into this grocery store chain as well.

Continue reading


Source Fool.com