California consumers may be interested in learning that Target and Kroger have reportedly been in talks over a potential merger for a number of months. Target, which is based in Minneapolis, is considering the merger as a means to boost its grocery offerings.

According to Fast Company magazine, the two retail giants have been in discussions since the summer of 2017. Together, the two companies have 4,600 stores and annual sales of $195 million. The value of the merger would be greater than $35 billion.

Kroger and Target were prompted to engage in talks in order to be better positioned to fight off competition from Amazon. Target currently only does 20 percent of its business in grocery sales. Amazon’s takeover of Whole Foods has placed added pressure on both chains. Target also acquired Shipt in a $550 million deal. Shipt, which offers same-day delivery service for Kroger in some markets, might make the merger more appealing to Kroger. An analyst with Wells Fargo stated that the merger would give both companies an enhanced scale but would not solve either company’s underlying weaknesses.

Companies that are considering mergers and acquisitions might want to consult with commercial law attorneys who regularly assist businesses with these types of transactions. When mergers and acquisitions are done well, they may provide quick growth while strengthening both companies. Some mergers and acquisitions may not be good ideas, however. Lawyers may help their clients to thoroughly analyze the target companies and to complete market analyses before their clients decide to proceed. They may then offer legal guidance throughout the process and work to help their clients to complete the transactions if they are good decisions.

Source: USA Today, “Retail giants Kroger and Target are in merger talks, report claims“, Alexander Coolidge, March 23, 2018