In an email found within the motion by Digital Currency Group (DCG) and Barry Silbert to dismiss the lawsuit initiated by the New York Attorney General, discussions of a potential merger between Gemini and Genesis were revealed before Genesis ultimately opted to declare bankruptcy. “Combined Gemini and Genesis would be a juggernaut and would be […]
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Kroger Inc., facing regulatory pushback over its plan to merge with rival grocery chain Albertsons Cos. Inc. in a roughly $25 billion deal, said Tuesday it typically lowers prices for consumers after consummating a deal.
Critics of the deal have argued it’s more likely to lead to higher prices as it will further reduce competition, especially after both companies have been aggressive and active acquirers of smaller retailers with at least $19.5 billion of deals since 1998, as the New York Times reported in 2022. The biggest deal was Albertsons’ $9.4 billion takeover of Safeway in 2014.
“We believe the way to be America’s best grocer is to provide great value by consistently lowering prices and offering more choices,” Kroger
KR,
CEO Rodney McMullen said in a statement on Tuesday.
“When we do this, more customers shop with us and buy more groceries, which allows us to reinvest in even lower prices, a better shopping experience, and higher wages.”
The retailer invested more than $125 million to lower prices at Harris Teeter after a 2014 merger, he said. It spent more than $100 million to cut prices at Roundy’s after a 2016 deal, he added.
That move and other measures reduced its gross margin by 5% over the last 20 years, it said, while rivals such as Amazon.com Inc.
AMZN,
Ahold Delhaize
AD,
Walmart Inc.
WMT,
and Dollar General Corp.
DG,
have grown margins by 22%, 4%, 1% and 2%, respectively in the same period, according to Kroger’s estimates.
Critics of the Kroger/Albertsons
ACI,
tie-up have argued that the combined entity was more likely to raise prices, especially after food companies enjoyed record profits during the pandemic thanks to their pricing power.
Kroger and Albertsons also need to persuade regulators that the merger will increase competition even as it further consolidates the market. Opponents of the deal include a bipartisan group of attorneys general, who have sued Albertsons to block the payment of a nearly $4 billion special dividend until regulators complete a review of the proposed merger.
The deal also comes during a period of high inflation that has made shoppers weary and eager to find bargains. In its most recent earnings report from November, Kroger offered cautious guidance citing continued near-term economic pressures and food-at-home disinflation.
The Cincinnati-based company has been selling stores and making concessions to get the Albertsons deal over the line. It said its customers were showing signs of pressure from higher interest rates, reduced savings and fewer government benefits, even as inflation is decelerating.
In January, Kroger and Albertsons said they remain in active dialogue with the Federal Trade Commission and individual state Attorneys General.
But they said the close was more likely to happen during the first half of Kroger’s fiscal 2024, which stretches through Aug. 17.
“While this is longer than we originally thought, we knew it was a possibility and our merger agreement and divestiture plan accounted for such potential timing,” the companies said in a joint statement.
Kroger has pledged to spend $500 million post-close to lower prices and to invest $1.3 billion to enhance the customer experience and $1 billion to support wages. The company has further said it would not close stores, distribution centers or manufacturing facilities, or lay off front-line employees. The combined entity will have more than 700,000 part-time and full-time employees.
Kroger’s stock was down 0.6%, and has gained 1.7% in the last 12 months, underperforming the S&P 500
SPX,
which has gained 21%.
Robinson Aircraft, which does business as Horizon Aircraft, said that Chief Executive Brandon Robinson would become chairman after it goes public.
Horizon, which is developing hybrid-electric vertical take-off aircraft, is set to merge with special-purpose acquisition company Pono Capital Three
PTHR,
to go public.
After the merger, the combined company will have five directors, including three of who will be independent.
The combined company will be renamed Horizon Aircraft Holdings and will trade under the ticker HOVR.
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Crypto mining companies Hut 8 Mining Corp. and US Bitcoin Corp (USBTC) have combined operations in an all-stock merger of equals to form a new United States-domiciled entity named Hut 8 Corp (New Hut).
Canada-based Hut 8 announced the completion of the merger on Nov. 30, dubbed as the “largest mergers and acquisitions transaction” in crypto by New Hut CEO Jaime Leverton. Before the merger, Leverton served as CEO of Hut 8 for over three years.
After much anticipation… we’re thrilled to announce the completion of our merger of equals with USBTC! We are now officially operating as a U.S.-domiciled entity, Hut 8 Corp. with 825 MW of energy under management across 11 sites with self-mining, hosting, managed services, and… pic.twitter.com/yJ3uou326o
— Hut 8 (@Hut8Mining) November 30, 2023
The merger will result in the delisting of Hut 8 common stocks from the Toronto Stock Exchange and Nasdaq by or before Dec. 4. It will be replaced by New Hut common stocks under the ticker symbol “HUT.” Amid the delisting and relisting process, Hut8 shareholders received 0.2 of a share of New Hut common stock for every Hut 8 share held.
Asher Genoot, president of New Hut, revealed the company’s plan to ready itself for the upcoming Bitcoin (BTC) halving. By combining resources, “New Hut has access to approximately 825 MW [megawatts] of gross energy across six sites with self-mining, hosting, and managed service operations,” the announcement reads.
Hut8 received final clearance from the Supreme Court of British Columbia to merge with USBTC in September. However, the planning process began in February.
At the time, the merger was subject to court and regulatory approval by U.S. and Canadian authorities. Adding to the legal complexity, USBTC was undergoing “a legal dispute” with the City of Niagara Falls in New York against residents who had criticized the mining operations for their alleged noise pollution. The dispute was settled on April 7.
Related: Bitcoin mining firm Phoenix Group delays share listing
X (formerly Twitter) and Block co-founder Jack Dorsey recently took steps to promote the decentralization of Bitcoin mining operations.
Dorsey recently led a $6.2 million seed round for Mummolin, the parent company of the new decentralized Bitcoin mining pool Ocean, which is designed to provide more transparency into the mining process and enable miners to receive block rewards directly from Bitcoin rather than mining pools.
Magazine: Real AI & crypto use cases, No. 4: Fight AI fakes with blockchain
Update (Dec. 1 at 1:06 pm UTC): This article has been updated to clarify that Hut 8 shareholders received 0.2 of a share of New Hut common stock, rather than a complete share, for every one share of Hut 8 stock held.
Healthpeak Properties Inc. and Physicians Realty Trust said Monday they are combining in an all-stock merger of equals valued at about $21 billion.
Under the terms of the deal, each of Milwaukee-based Physicians Realty’s
DOC,
shares will be converted into 0.674 of a newly issued share by Denver-based Healthpeak
PEAK,
The deal will create a real estate platform “dedicated to healthcare discovery and delivery with a 52 million square foot portfolio, including 40 million square feet of outpatient medical properties concentrated in high-growth markets such as Dallas, Houston, Nashville, Phoenix, and Denver,” the companies said in a joint statement.
Scott Brinker, the CEO of Healthpeak, will become CEO of the combined company, while John Thomas, head of Physicians Realty, will be vice chair of the board.
“This combination joins two leading platforms, bringing them to the next level to create a company uniquely focused on healthcare discovery and delivery, a large and attractive playing field with strong secular growth,” Brinker said.
The deal is expected to boost run-rate adjusted funds from operations, or AFFO, for both companies. It’s expected to generate run-rate synergies of at least $40 million by the end of year one and up to $60 million by the end of year two.
The deal is expected to close in the first half of 2024, after which time it will trade as Healthpeak Properties and list as “DOC” on the New York Stock Exchange.
The combined company will pay an annualized dividend of $1.20 a share, which is consistent with Healtpeak’s current dividend level and equal to a pro forma AFFO payout ratio of 80% or below.
Healthpeak will assume Phsycials Realty’s outstanding senior unsecured notes and term loan and will enter a new five-year, $500 million term loan at a rate of SOFR plus 85 basis points. Proceeds from the loan will be used for general corporate purposes and the repayment of borrowings from a commercial paper program.
Healthpeak’s stock was down 1.3% premarket, while Physicians Realty was up 1.2%.
See also: Spirit Realty’s stock rallies on $9 billion buyout by Realty Income Corp.
Exxon Mobil said Wednesday it agreed to buy shale rival Pioneer Natural Resources for $59.5 billion in an all-stock deal, or $253 per share.
As part of the agreement, Pioneer stockholders will receive 2.3234 shares of Exxon for every Pioneer share they own. The deal, Exxon’s biggest since its acquisition of Mobil, is expected to close in the first half of 2024, the companies said in a release.
Pioneer shares were up nearly 2% in premarket trading, while Exxon was down more 2%.
Pioneer in early trading
Exxon said its production volume in the Permian Basin would more than double to 1.3 million barrels of oil equivalent per day once the deal closes.
“The combined capabilities of our two companies will provide long-term value creation well in excess of what either company is capable of doing on a standalone basis,” Exxon Mobil CEO Darren Woods said in a statement.
“As importantly, as we look to combine our companies, we bring together environmental best-practices that will lower our environmental footprint and plan to accelerate Pioneer’s net-zero plan from 2050 to 2035,” Woods added.
Pioneer Chief Executive Scott Sheffield also noted that the company will be “be better positioned for long-term success through a size and scale that spans the globe and offers diversity through product and exposure to the full energy value chain” once the acquisition is completed.
The announcement comes after The Wall Street Journal reported last week that both companies were closing in on a deal. Since then, Pioneer shares are up more than 10%.
For the year, however, Pioneer is only up 3.9%. The S&P 500, by comparison, has risen 13% in that time. Exxon shares have also struggled in 2023, climbing modestly.