By David KostyanAssociated PressPublished Mar 07, 2017 10:06AMMILE STORE STORIESSTORE STORIE STORIESAUGUSTA, Ga.
(AP) In a stunning reversal of fortune, Aldi has won a $1.6 billion federal contract to buy Walgens grocery chains across the country.
The deal, which Aldi had been seeking for months, was announced Wednesday night by Walgarts chairman and CEO Jim McBride.
The agreement covers nearly 100,000 stores in 28 states and Puerto Rico.
Walgens is a major grocery chain that sells grocery items, but has long struggled to gain market share and attract shoppers with its prices.
A deal to buy Aldi, which sells groceries, could help the retailer retain its foothold in the nation’s largest grocery market.
The deal also includes other big-box chains, including Whole Foods Market, which has its own store.
The company has been on a downward trend for the past few years.
Aldi said last year that its sales fell in the second quarter and its net income fell to $1 million in the quarter ending in May from $2.6 million a year earlier.
Its stock is up more than 5 percent so far this year.
The acquisition of Aldi will give the chain an additional $600 million to invest in new stores and expand its operations in cities across the United States.
The combined company would have an annual gross revenue of more than $2 billion and about $3 billion in annual profit, according to a statement.
Walmart said it expects to reach a $10 billion merger agreement with Walgreen soon.