Albertsons Sues Kroger for Failing to Secure Merger
[Stay on top of transportation news: Get TTNews in your inbox.]
Albertsons is giving up on its merger with Kroger and it is suing the grocery chain, saying it didn’t do enough to secure regulatory approval for the $24.6 billion agreement.
The move came the day after two judges halted the merger in separate court cases. U.S. District Court Judge Adrienne Nelson issued a preliminary injunction blocking the merger Dec. 10 after holding a three-week hearing in Portland, Ore. An hour later, Judge Marshall Ferguson in Seattle issued a permanent injunction barring the merger in Washington after concluding it would lessen competition in the state and violate consumer protection laws.
Kroger and Albertsons in 2022 proposed what would be the largest grocery store merger in U.S. history. The companies said a merger would help them better compete with big retailers like Walmart, Costco and Amazon.
Under the merger agreement, Kroger and Albertsons — which compete in 22 states — agreed to sell 579 stores in places where their locations overlap to C&S Wholesale Grocers, a New Hampshire-based supplier to independent supermarkets that also owns the Grand Union and Piggly Wiggly store brands.
Kroger said that it disagrees with Albertsons “in the strongest possible terms.” (Shelby Tauber/Bloomberg News)
But the Federal Trade Commission sued to block the merger earlier this year, saying it would raise prices and lower workers’ wages by eliminating competition. It also said the divestiture plan was inadequate and that C&S was ill-equipped to take on so many stores.
Kroger and Albertsons rank Nos. 26 and 42, respectively, on the Transport Topics Top 100 list of the largest private carriers in North America, and Kroger, Albertsons and C&S rank Nos. 3, 5 and 9, respectively, on the TT grocery carriers list.
On Dec. 11, Albertsons said that Kroger failed to exercise “best efforts” and to take “any and all actions” to secure regulatory approval of the companies’ agreed merger transaction.
Lori Heino-Royer of Waabi discusses the latest developments, breakthroughs and key industry partnerships in autonomous trucking. Tune in above or by going to RoadSigns.ttnews.com.
Albertsons said Kroger refused to divest the assets necessary for antitrust approval, ignored regulators’ feedback and rejected stronger divestiture buyers.
Kroger willfully breached the merger agreement in several key ways, including by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons.
“Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates and consumers,” said Tom Moriarty, Albertsons’ general counsel, in a statement.
Kroger said that it disagrees with Albertsons “in the strongest possible terms.” It said early Dec. 11 that Albertsons was responsible for “repeated intentional material breaches and interference throughout the merger process.”
Shares of Albertsons rose more than 2% at the opening bell, while Kroger’s stock rose slightly.
Want more news? Listen to today's daily briefing below or go here for more info:
