The Kroger Co. (NYSE: KR) Friday (19 August) announced it has reached an agreement to purchase seven supermarkets in New Mexico from Furrs Supermarkets Inc.

Four of the stores to be acquired are located in Albuquerque, while the remaining three stores are located in Santa Fe, Los Alamos and Socorro. The stores, which range in size from 43,000 square feet to 77,000 square feet, will operate under the Smith’s Food & Drug Stores banner.

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Terms of the transaction, which Kroger expects to complete by August 31, 2001, were not released.

“These stores are located in attractive markets that will provide new growth opportunities for Smith’s as we build our business in New Mexico,” said James Hallsey, Smith’s president. “We’re looking forward to meeting soon with associates at these Furrs stores to discuss career opportunities.”

Separately, Kroger announced it has reached an agreement to sell all four Smith’s stores in El Paso, Texas, and one Smith’s store in Las Cruces, New Mexico, to Fleming. Fleming is expected to offer employment opportunities to substantially all of the associates involved with the operations of the five Smith’s stores. Both companies expect the transaction to be completed by August 31, 2001.

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Following the completion of both transactions, Smith’s will operate 116 stores in seven states, including 25 stores in New Mexico.

Headquartered in Cincinnati, Ohio, Kroger is the nation’s largest retail grocery chain. At the end of the first quarter, the Company operated 2,380 supermarkets and multi-department stores in 32 states under approximately two dozen banners, including Kroger, Fred Meyer, Ralphs, Smith’s, King Soopers, Dillon, Fry’s, City Market, Food 4 Less and Quality Food Centers. Kroger also operates 788 convenience stores, 407 fine jewelry stores and 41 food processing plants.

This press release contains certain forward-looking statements relating to the Company. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. We assume no obligation to update the information contained herein. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to, the failure to satisfy conditions to closing the transaction as set forth in the definitive documentation and other factors affecting the businesses of the Company which are described in filings with the Securities and Exchange Commission.

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