Under the terms of the agreement, Cincinnati-based Kroger will pay $49.38 for each of the supermarket chain's shares. The price represents a 2 percent increase over the company's Monday closing stock price.
"This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates," Kroger Chairman and CEO David Dillon said in a statement.
The deal has been approved by both companies' boards, but remains subject to Harris Teeter shareholder approval. Harris Teeter announced in February that it was exploring strategic alternatives, including a possible sale.
Harris Teeter operates 212 stores in eight southeastern and mid-Atlantic states and Washington D.C., along with a pair of distribution centers and a dairy facility in North Carolina. Its fiscal 2012 revenue totaled about $4.5 billion.
In comparison, Kroger operates 2,419 stores in 31 states. In addition to its flagship brand of supermarkets, it also owns Ralphs, Fry's, Food 4 Less and other brands. The acquisition adds another three states to its store footprint.
In a conference call with investors, J. Michael Schlotman, who is Kroger's chief financial officer, said the deal marks Kroger's entry into several attractive, high-growth markets such as Charlotte, N.C., and Washington D.C.
