More than 200 Giant Eagle supermarkets face an uncertain future after Kroger announced a $1.65 billion deal to acquire the family-owned chain.

The acquisition marks the first major transaction under Kroger CEO Greg Foran and the grocery giant's biggest deal since its proposed $25 billion merger with Albertsons collapsed in 2024.

Giant Eagle operates about 197 supermarkets and 11 standalone pharmacies across northern Ohio, western Pennsylvania, West Virginia, Maryland and Indiana, generating roughly $9 billion in annual sales.

The deal will significantly expand Kroger's footprint in the Midwest and Mid-Atlantic as the grocery giant battles rivals Walmart and Amazon for increasingly value-conscious shoppers.

'We evaluated the opportunity carefully, and the strategic fit is clear,' Foran said in a press release on Wednesday.

'Giant Eagle expands our reach into attractive adjacent markets,' he added.

Giant Eagle told KDKA-TV that it plans to retain its name and continue operating its supermarkets, pharmacies and Market District stores as a standalone division within Kroger.

The company also said it intends to keep its myPerks loyalty program, maintain its headquarters in Cranberry Township and pursue additional opportunities for future growth.

Alongside the acquisition, Kroger is looking to win over shoppers by cutting prices on thousands of products, with the savings expected to come from increased direct imports and greater use of technology across its operations.

'This acquisition comes at a challenging time for traditional grocers,' Consumer Edge analyst Michael Gunther told CNBC.

He noted that specialty chains such as Trader Joe's are outperforming rivals, while discount retailers including Aldi continue to attract budget-conscious shoppers looking to stretch their grocery dollars.

Gunther said the acquisition should also give Kroger a competitive edge, noting that Giant Eagle's customer base tends to skew older and is generally more resilient during periods of economic uncertainty. 

The deal comes amid a wave of consolidation across the consumer sector, including food, beverage, personal care, pet products and healthcare, as companies seek to navigate persistent inflation, changing shopping habits and intensifying competition.  

Kroger said the acquisition includes $1.25 billion in cash and the assumption of roughly $400 million in Giant Eagle's outstanding liabilities. 

The grocery giant expects the transaction to close in 2027 and begin boosting adjusted profits by the second full year after the deal is completed. 

Kroger also said it plans to maintain its quarterly dividend and $2 billion share buyback program while keeping its target net debt-to-adjusted EBITDA ratio between 2.3 and 2.5. 

RBC Capital Markets is serving as Kroger's financial adviser on the deal, while Wells Fargo is advising Giant Eagle. 

Kroger declined to comment to the Daily Mail.