Retail giant Costco has agreed to merge with US logistics giant RYD in a deal worth $7.5bn (£4.3bn) to create the world’s biggest grocery logistics network, which will be the biggest company in the US.
Costco and Ryd were the first to be linked in a joint venture with a US company, Costco Wholesale Corp. (COST), which will now have the right to purchase the combined company’s assets and shareholders.
“Costco and Costco Whole Foods are going to be the largest grocery retailers in the world.
We will continue as the world leader in logistics and retail,” said Robert Ryd, chairman of Costco Whipsale.
Costco said it had reached a deal with RYD that will see Costco Whilesale, a wholly-owned subsidiary of Ryd Holdings Plc (RYD), become a full-fledged subsidiary of Costco, the largest retailer in the United States.
RYD, which operates warehouses and retail stores in more than 120 countries, employs nearly 1.4 million people, employs more than 30,000 workers and sells more than 400 million packages of groceries a year.
Ryd also owns a small portion of the grocery chain CVS.
The deal is subject to regulatory approvals and Costco’s annual meeting on Monday.
Costco is looking to expand its reach into the United Kingdom, Canada, Australia, and the European Union.
RWD will retain a 25% stake in Costco and its $1.1bn investment in the company’s UK operations will continue.
“The partnership with Costco will create a global brand, enhance the logistics platform and deliver superior services and value for customers in the UK, Australia and the EU,” said Mr Ryd.
“With this acquisition, Costco will be able to accelerate its efforts to provide a global logistics platform that can better serve its customers and grow its brand.”
The deal will give Costco more than 100,000 retail stores, more than 3,000 distribution centers and over 2.3 million employees across the United