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Exhibit 8.2
March 4, 1999
The Kroger Co.
1014 Vine Street
Cincinnati, Ohio 45202
Ladies and Gentlemen:
We are acting as your counsel in connection with the proposed acquisition
by The Kroger Co. ("Kroger") of Fred Meyer, Inc. ("Fred Meyer") pursuant to the
proposed merger (the "Merger") of Jobsite Holdings, Inc., a wholly-owned
subsidiary of Kroger ("Merger Sub"), into Fred Meyer, with Fred Meyer surviving
the Merger. The Merger will be consummated pursuant to the Agreement and Plan of
Merger dated as of October 18, 1998 by and among Kroger, Merger Sub and Fred
Meyer (the "Merger Agreement").
Kroger has filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "1933 Act"), a registration statement on
Form S-4 (the "Registration Statement"), with respect to the common shares of
Kroger to be issued to holders of shares of common stock of Fred Meyer in
connection with the Merger. In addition, Kroger has prepared, and we have
reviewed, a Joint Proxy Statement/Prospectus which is contained in and made a
part of the Registration Statement (the "Joint Proxy Statement"), and the
Appendices thereto, including the Merger Agreement. In rendering the opinion set
forth below, we have relied upon the facts stated in the Joint Proxy Statement
and upon such other documents as we have deemed appropriate, including the
representations of Kroger and Fred Meyer referred to in the Joint Proxy
Statement and set forth in certain officer's certificates from Kroger and Fred
Meyer.
We have assumed that all parties to the Merger Agreement have acted, and
will act, in accordance with the terms of such Merger Agreement and that the
Merger Agreement will be consummated at the effective time pursuant to the terms
and conditions set forth in the Merger Agreement without the waiver or
modification of any such terms and conditions.
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Based upon and subject to the foregoing, and to the qualifications,
limitations, representations and assumptions contained in the portion of the
Joint Proxy Statement captioned "U.S. Federal Income Tax Consequences," and in
certain officer's certificates from Kroger and Fred Meyer, the portion of the
Joint Proxy Statement captioned "U.S. Federal Income Tax Consequences"
represents our opinion as to the material U.S. federal income tax consequences
of the Merger under applicable law. No opinion is expressed on any matters
other than those specifically referred to herein.
This opinion is furnished to you for use in connection with the
Registration Statement and may not be used for any other purpose without our
prior express written consent. We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the use of our name in that
portion of the Joint Proxy Statement captioned "U.S. Federal Income Tax
Consequences." In giving such consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the 1933
Act.
Very truly yours,
FRIED, FRANK, HARRIS,
SHRIVER & JACOBSON
/s/ Fried, Frank, Harris, Shriver
& Jacobson
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THE KROGER CO.
AND
JOBSITE HOLDINGS INC.
OFFICER'S CERTIFICATE
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The undersigned officer of The Kroger Co., in connection with the
opinions to be delivered by Cleary, Gottlieb, Steen & Hamilton and Fried,
Frank, Harris, Shriver & Jacobson (i) pursuant to Sections 7.2(e) and
7.3(e) of the Agreement and Plan of Merger dated as of October 18, 1998 by
and among The Kroger Co. ("Kroger"), Jobsite Holdings, Inc. ("Merger Sub")
and Fred Meyer, Inc. ("Fred Meyer") (the "Agreement") and (ii) concerning
the Joint Proxy Statement/Prospectus contained in the Form S-4 being filed
with the SEC with respect to the Kroger Common Stock to be issued to Fred
Meyer stockholders in the Merger, and recognizing (1) that said law firms
will rely on this Certificate in delivering such opinions, (2) that it will
be necessary to provide a written confirmation of each of the following
representations at the Effective Time or an explanation prior to such time
as to why confirmation is not possible and (3) that the tax opinions may
not accurately describe the consequences of the Merger if any of the
following representations are not accurate in all respects, hereby
certifies that to the extent the following facts and representations relate
to Kroger or Merger Sub, such representations are true, complete and
correct in all respects and, to the extent the following representations
relate to Fred Meyer, the undersigned has no reason to believe such
representations are not true, and further certifies that (unless otherwise
defined herein, capitalized terms shall have the meanings ascribed to them
in the Agreement):
1. The fair market value of the Kroger Common Stock received by each
Fred Meyer stockholder will be approximately equal to the fair market value
of the Fred Meyer Common Stock surrendered in the Merger. This assumes that
the market will act in a rational manner and continue to value Kroger Common
Stock and Fred Meyer Common Stock at approximately the same levels at the
time of the Merger.
2. Following the Merger, Fred Meyer will hold at least 90 percent of the
fair market value of its net assets and at least 70 percent of the fair market
value of its gross assets and at least 90 percent of the fair market value of
Merger Sub's net assets and at least 70 percent of the fair market value of
Merger Sub's gross assets held immediately prior to the Merger. For purposes
of this representation, amounts used by Fred Meyer or Merger Sub to pay
reorganization expenses, and all redemptions and distributions (except for
regular, normal dividends) made by Fred Meyer or Merger Sub will be included
as assets of Fred Meyer or Merger Sub, respectively, immediately prior to
the Merger. For purposes of this representation, if, as a result of the Merger,
a federal or state regulatory authority requires Fred Meyer to sell assets to
unrelated parties, the fair market value of such assets shall be considered to
be the amount received in respect of such sales of such assets.
3. Prior to the Merger, Kroger will be in control of Merger Sub within
the meaning of Section 368(c) of the Internal Revenue Code of 1986, as
amended (the "Code").
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4. Kroger has no plan or intention to cause Fred Meyer to issue
additional shares of its stock that would result in Kroger losing control
of Fred Meyer within the meaning of Section 368(c) of the Code.
5. Neither Kroger nor any person related to Kroger (within the meaning
of Treasury Regulations Section 1.368-1(e)(3)) will acquire Fred Meyer
Stock in connection with the Merger for any consideration other than Kroger
Common Stock. Kroger will not assume any liabilities of Fred Meyer
shareholders in connection with the Merger. Kroger will not, in connection
with the Merger, repurchase, redeem or otherwise reacquire Kroger Common
Stock issued to stockholders of Fred Meyer pursuant to the Merger, either
directly or through a related person (within the meaning of Treasury
Regulations Section 1.368-1(e)). Kroger will not cause an extraordinary
distribution with respect to Fred Meyer Common Stock to occur and is not
aware of any extraordinary distribution with respect to Fred Meyer Common
Stock that has occurred or is intended, in each case in connection with the
Merger. Kroger also has not participated, and in connection with the
Merger, will not participate, in a redemption or acquisition of Fred Meyer
Common Stock made by Fred Meyer or a person related to Fred Meyer. Kroger
is not aware of any plan of Fred Meyer (or a person related to Fred Meyer)
to affect a redemption or acquisition of Fred Meyer Common Stock.
6. Other than the Merger, Kroger has no plan or intention to liquidate
Fred Meyer, to merge Fred Meyer with and into another corporation, to sell
or otherwise dispose of the stock of Fred Meyer, or to cause Fred Meyer to
sell or otherwise dispose of any of its assets or any of the assets acquired
from Merger Sub, except, in each case, for dispositions made in the ordinary
course of business or transfers of assets or stock described in Treasury
Regulations Section 1.368-2(k)(2).
7. Merger Sub will have no liabilities assumed by Fred Meyer, and will
not transfer to Fred Meyer any assets subject to liabilities, in the
Merger.
8. Following the Merger, Kroger will cause Fred Meyer and/or members
of Kroger's "qualified group" (within the meaning of Treasury Regulations
Section 1.368-1(d)(4)(ii)) to continue Fred Meyer's historic business or
use a significant portion of Fred Meyer's historic business assets in a
business (within the meaning of Treasury Regulation Section 1.368-1(d)).
9. Kroger and Merger Sub will pay their respective expenses, if any,
incurred in connection with the Merger; provided, however, that (i) the
filing fees in connection with the filing of the Form S-4 and the Joint
Proxy Statement/Prospectus with the SEC, (ii) all filing fees in connection
with any filings, permits or approvals required under applicable state
securities or "blue sky" laws in connection with the Merger, (iii) the
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expenses incurred in connection with printing and mailing of the Form S-4
and the Joint Proxy Statement/Prospectus, and (iv) any commitment fee
payable in connection with any planned refinancing or replacement by Kroger
of, or any commitment to obtain the consent of the requisite lenders to
consummate the Merger under, the financing facilities listed as items 1 and
2 on Schedule 3.5(a)(iii) of the Fred Meyer Disclosure Letter and the
financing facilities listed on Schedule 4.5(a) of the Kroger Disclosure
Letter shall be shared equally by Kroger and Fred Meyer.
10. There is no intercorporate indebtedness existing between Kroger
and Fred Meyer or between Merger Sub and Fred Meyer that was issued,
acquired, or will be settled at a discount.
11. In the Merger, shares of Fred Meyer stock representing control of
Fred Meyer, as defined in Section 368(c) of the Code, will be exchanged
solely for voting stock of Kroger. For purposes of the representation,
shares of Fred Meyer stock that are exchanged for cash or other property
originating with Kroger or any person related to Kroger (within the meaning
of Treasury Regulations Section 1.368-1(e)(3)) will be treated as
outstanding Fred Meyer stock on the date of the Merger.
12. Neither Kroger nor any person related to Kroger (within the
meaning of Treasury Regulations Section 1.368-1(e)(3)) beneficially owns,
directly or indirectly, nor has beneficially owned during the past five
years, directly or indirectly, any stock of Fred Meyer.
13. Neither Kroger nor Merger Sub is an investment company as defined
in Section 368(a)(2)(F)(iii) and (iv) of the Code.
14. On the date of the Merger, the fair market value of the assets of
Fred Meyer will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which the assets are subject.
15. None of the compensation received by any stockholder-employee of
Fred Meyer will be separate consideration for, or allocable to, any of such
stockholder-employee's shares of Fred Meyer stock; none of the shares of
Kroger stock received by any stockholder-employee of Fred Meyer pursuant to
the Merger will be separate consideration for, or allocable to, any
employment agreement except for Kroger stock issued in satisfaction of Fred
Meyer Options or warrants under the Warrant Agreement or the Supplemental
Warrant Agreement; and the compensation paid to any stockholder-employee of
Fred Meyer will be for services actually rendered and will be commensurate
with amounts paid to third parties bargaining at arm's length for similar
services.
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16. Merger Sub was formed solely to facilitate the Merger and has not
conducted and will not conduct any business or activity other than in
connection with the Merger.
17. Each of the representations made by Kroger and Merger Sub and
facts concerning Kroger set forth in the Agreement, the Form S-4 and the
Joint Proxy Statement/Prospectus are true, accurate, and complete in all
material respects as of the date of this letter.
18. Kroger corporate business reasons for consummating the Merger are
as set forth in the Joint Proxy/Statement Prospectus.
19. Kroger has not distributed the stock of a "controlled corporation"
(as defined in Section 355(a) of the Code) in a transaction subject to
Section 355 of the Code within the past two years.
20. The Fred Meyer shareholders receiving Kroger shares in the Merger
will not receive any rights in connection with the Kroger shares other
than the Kroger Rights, which are not currently separately tradeable
from the Common Stock. The Kroger Rights were adopted in a plan the
principal purpose of which was to assure that all shareholders
receive fair and equal treatment in a takeover by establishing a
mechanism by which Kroger could, in the future, provide its
shareholders with rights to purchase stock at substantially less than
fair market value in response to unsolicited offers to acquire Kroger.
THE KROGER CO.
Dated: March 4, 1999 By: /s/ Paul Heldman
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Paul Heldman
Senior Vice President, Secretary
and General Counsel
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