The deal, worth up to $700mn, aims to strengthen the grocer’s online business and comes a week after it struck a deal with British online supermarket Ocado.
Under the deal, Kroger said it would initially pay $200mn to buy the meal-kit firm and would pay up to $500mn in incentives if the company “achieved certain milestones.”
Competing with rivals Blue Apron and HelloFresh, Home Chef has 1,00 employees and achieved $250mn in sales last year.
Kroger, the largest US supermarket by stores and sales, said that the tie-up will “significantly accelerate availability of meal kits” as it plans to make the meal kits available both online and in-store.
Yael Cosset, Kroger chief digital officer, said: “This merger will introduce Kroger’s 60m shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger.”
The move comes as Kroger tries to tap into the fast-growing meal kit market.
According to Earnest Research, overall US meal-kit sales grew 40.7% last year.
Other retailers have also moved into the meal kit business. Grocery chain Albertsons bought meal kit company Plated last year and Walmart has said that it will make meals-in-a-box availale in 2,000 stores this year,