UPDATE 2-Kroger to buy Harris Teeter Supermarkets in $2.5 bln deal
* Offer of $49.38/shr represents premium of 1.8 pct to Harris Teeter's Monday close
* Kroger to assume Harris Teeter's debt of about $100 mln
* Deal marks second-largest acquisition for Kroger
* Harris Teeter share up 1 pct premarket, Kroger shares up about 2 pct
(Adds background, updates shares)
July 9 (Reuters) - Kroger Co, the biggest U.S. supermarket operator, said it would buy Harris Teeter Supermarkets Inc in a $2.5 billion deal that will boost its presence in the southeast and mid-Atlantic regions of the United States.
Regional supermarkets like North Carolina-based Harris Teeter are struggling to maintain market share against chains and mass merchandisers such as Costco Wholesale Corp, Wal-Mart Stores Inc and Whole Foods Market Inc, leading to consolidation in the industry.
The Harris Teeter deal, which includes the assumption of $100 million of debt, is the second-largest acquisition for Kroger after its $13.89 billion purchase of Fred Meyer Inc in 1999 and the second biggest deal in the U.S. grocery industry this year.
Supervalu Inc struck a $3.3 billion deal in January to reduce its heavy debt by selling five of its supermarket chains to an investor group led by Cerberus Capital Management LP.
Kroger's offer of $49.38 per share in cash represents a premium of 1.8 percent to Harris Teeter's Monday close. The stock has run up 31 percent since Jan. 18, when the first reports emerged that the company was up for sale.
Reuters reported in February that Kroger was among the likely suitors.
The combined business will operate 2,631 supermarkets in 34 states and the District of Columbia.
The 130-year-old Kroger, which owns the Ralphs, Smith's and Food 4 Less chains as well as its Fred Meyer, namesake and other stores, said it would finance the deal with debt but would maintain its dividend and share buyback program.
Harris Teeter, founded during the Great Depression, operates 212 supermarkets in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia.
It reported revenue of about $4.5 billion for 2012.
Harris Teeter will continue to be led by its top management and there will be no store closures, the companies said in a statement on Tuesday.
Kroger said it expected the acquisition to add 6 to 9 cents to its earnings per share in the first full year after close, excluding transition and transaction expenses.
Harris Teeter's biggest shareholder is private equity firm Neuberger Berman, with an 11.7 percent stake, according to Thomson Reuters data.
BofA Merrill Lynch is Kroger's financial adviser, while Arnold & Porter LLP is the legal adviser. J.P. Morgan Securities is the financial adviser to Harris Teeter and McGuireWoods is the legal adviser.
Harris Teeter shares were up 1 percent at $48.89 in heavy premarket trading. Kroger shares rose 2 percent to $36.90.
(Reporting by Siddharth Cavale in Bangalore; Additional reporting by Patturaja Murugaboopathy; Editing by Saumyadeb Chakrabarty and Ted Kerr)