Albertsons has abandoned all efforts to merge with Kroger and is now suing the grocery giant for allegedly failing to secure approval on a previously proposed $24.6 billion deal.
Albertsons filed the lawsuit on Wednesday. It comes just a day after two judges issued rulings blocking the big-time merger.
U.S. District Court Judge Adrienne Nelson issued an injunction Tuesday, preventing the merger after a lengthy hearing in Oregon. Hours later, Judge Marshall Ferguson in Seattle also delivered an injunction, saying that the deal would reduce competition and violate consumer protection laws in Washington.
The deal to merge the two companies, first proposed in 2022, aimed to create the largest grocery chain in American history, combining Kroger’s and Albertsons’ collective operations across 22 states, as previously covered by The Dallas Express.
Both companies initially claimed the merger would help them compete more effectively with massive retailers such as Walmart, Costco, and Amazon.
However, the Federal Trade Commission intervened in the deal earlier this year after an investigation surrounding both companies. The FTC directly opposed their collective claims, saying, “The proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans.”
In the recent lawsuit, Albertsons specifically accused its would-be partner of failing to make the necessary efforts to secure “antitrust” approval. The company claims that Kroger repeatedly ignored regulators’ concerns, refused to divest certain stores, and rejected stronger buyers for the divested assets, per WFAA News.
“Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates and consumers,” Tom Moriarty, Albertsons’ representing attorney, added.
The official statement from Albertsons claims that “this termination entitles Albertsons to an immediate $600 million termination fee and removes contractual constraints on Albertsons’ ability to pursue other strategic opportunities. In addition to the $600 million termination fee, Albertsons is entitled to relief reflecting the multiple years and hundreds of millions of dollars it devoted to obtaining approval for the merger, along with the extended period of unnecessary limbo Albertsons endured as a result of Kroger’s actions.”
In response, a Kroger spokesperson also released a statement, saying that Albertsons had committed “repeated intentional material breaches and interference throughout the merger process.” Kroger then further implied that Albertsons was responsible for the merger’s failure, adding that they disagree with the lawsuit’s claims in “the strongest possible terms.”
“This is clearly an attempt to deflect responsibility following Kroger’s written notification of Albertsons’ multiple breaches of the agreement, and to seek payment of the merger’s break fee, to which they are not entitled…Kroger looks forward to responding to these baseless claims in court,” Kroger’s statement read.
Bureau of Competition Director Henry Liu offered input in support of halting the merger, saying, “The FTC, along with our state partners, scored a major victory for the American people, successfully blocking Kroger’s acquisition of Albertsons.”
“This historic win protects millions of Americans across the country from higher prices for essential groceries—from milk, to bread, to eggs, ultimately allowing consumers to keep more money in their pockets,” Liu added.