Fred Meyer Inc. said Friday it will buy Quality Food Centers Inc. and Ralphs Grocery Co. for a combined $4.8 billion in stock and assumed debt to become the fourth-largest supermarket chain in the U.S., with a stronghold in the West.
The Portland-based company valued the Quality Food purchase at $1.7 billion and Ralphs at $3.1 billion, both including assumed debt. The combined company will have 88,000 employees and 800 stores in 14 states plus the No. 1 market share in Los Angeles, Seattle and Las Vegas.
The latest in a string of acquisitions will help Fred Meyer compete with Albertson’s Inc. and Safeway Inc. by cutting costs and boosting thin profit margins of about 2 cents per revenue dollar, analysts said.
Quality Food, based in Stamford, Conn., operates the upscale QFC grocery chain in the Puget Sound area of Washington and the Hughes Family Market chain in Southern California. Closely held Ralphs is based in Compton, Calif.
