Stater Bros. to Acquire Kroger’s Stake in Dairy

Colton-based Stater Bros. Holdings Inc. said it would buy Kroger Co.’s stake in Southern California’s largest milk processor, Santee Dairies Inc.

Stater owns 50% of the City of Industry-based dairy and is buying the remaining stake from Kroger for an unspecified amount. A filing last week with the Securities and Exchange Commission by Stater said it had agreed to loan about $55 million to the dairy and its bondholders to assume ownership. Kroger’s Ralphs stores will continue to buy some milk from the dairy, said Jack H. Brown, chief executive of both Stater and Santee Dairies.

Santee will keep its existing management and continue to supply milk under the Knudsen and Foremost brand names to supermarkets across Southern California, including the 157 Stater Bros. markets.

Stater was the only major chain in Southern California that did not own its own dairy. The deal is expected to become final at the end of the week.

-- Melinda Fulmer