Kroger considers buying online wholesaler Boxed for up to $500 million: source

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2018-01-13 03:24:46

(Reuters) – Grocery chain Kroger Co (KR.N) has considered buying online wholesaler Boxed, according to a person familiar with the matter, as more shoppers place food orders online and as competition with Inc (AMZN.O) heats up.

The potential deal, which arose as the New York-based startup was seeking funding, likely values Boxed at between $325 million and $500 million, said the person, who spoke on condition of anonymity.

Amazon’s $13.7 billion acquisition of Whole Foods Market last year to crack the U.S. grocery market heightened a sense of urgency among rivals looking for ways to counter competition from the world’s largest online retailer.

Target Corp (TGT.N), for instance, said last month it agreed to buy same-day delivery platform Shipt Inc for $550 million.

Boxed, which sells bulk staples like toilet paper and pet food to shoppers’ doorsteps, expects it may receive takeover offers from other retailers besides Kroger in coming weeks, the person said. Morgan Stanley is advising the startup.

Boxed Chief Executive Chieh Huang did not respond to an emailed request for comment. A Kroger spokeswoman said the company in general does not comment on rumor or speculation.

Forbes reported the news earlier on Friday.

Reporting By Jeffrey Dastin in San Francisco; Editing by Simon Cameron-Moore

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