The deal that would have been the largest grocery store merger is dead and now the subject of a lawsuit.
Two judges blocked the proposed merger of Albertsons and Kroger in separate court cases on Tuesday, The Associated Press reported. Seattle-based Judge Marshall Ferguson determined that the merger would result in less competition in Washington state, violating consumer protection laws.
Albertsons and Kroger, in the deal that started back in 2022, said the merger would allow them to compete with Walmart, Costco and Amazon.
It would have created a company worth $200 billion with 5,000 supermarkets, The New York Times reported.
The companies agreed to sell 579 stores where they overlapped markets with C&S Wholesale Grocers which owns Piggly Wiggly and Grand Union stores, the AP reported.
“Given the recent federal and state court decisions to block our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement,” Vivek Sankaran, chief executive of Albertsons, said in a statement to The New York Times. “We are deeply disappointed in the courts’ decisions.”
This week’s rulings were the latest that threatened the merger. The Federal Trade Commission sued to block it saying that prices would go up and wages would go down because there would be less competition.
On Wednesday, Albertsons filed a lawsuit against its former potential partner saying that Kroger didn’t make its “best efforts” to get approval for the merger, alleging that Kroger didn’t divest enough to get antitrust approval and ignored feedback from regulators, breaking the agreement, the AP reported.
“Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates and consumers,” Albertson’s attorney Tom Moriarty said in a statement to the AP.
Kroger officials said it did not agree with Albertson’s assessment and that it was Albertson’s fault for “repeated intentional material breaches and interference throughout the merger process.”
Kroger had agreed to pay Albertsons a $600 million breakup fee if the deal didn’t go through, The Wall Street Journal reported.
©2024 Cox Media Group
