RUMOR: Kroger and Whole Foods to merge?

Edward Kelly, an analyst for Credit Suisse, said a merger between Kroger Co. and Whole Foods Market would benefit both retailers, according to Supermarket News.

In a research note, Kelly said the possibility of a deal like this occurring is heightened by last week’s report that activist investor Jana Partners has taken a position in Whole Foods.

Edward Kelly, an analyst who covers Kroger for Credit Suisse, wrote that a purchase of Whole Foods “would marry each company’s strengths with the other’s weaknesses, (and) unlock massive cost synergies.” He added “Kroger now seems to have more incentive than ever to accelerate (mergers and acquisitions) to fill the void of weaker organic growth.”

Based on news reports and industry rumors, analysts seem anxious for someone to buy Whole Foods. While Kelly estimated a merger could help increase Whole Foods Sales by more than 3% and save the combined company $400 million to $600 million, there’s been no clear indication that either company is interested in such a deal.

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