Simone Del Rosario:
Grocery chain Albertsons is taking its ball and going home. After a district judge in Oregon blocked its $25 billion dollar merger with Kroger, Albertsons put the kibosh on the deal.
But that’s not all. Albertsons is suing Kroger, on Wednesday claiming it didn’t do what was necessary to get regulatory approval for the deal.
“Albertsons is seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole,” the company said in a statement. “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.”
The two grocery giants agreed to what would have become the largest US merger in supermarket history in October 2022. If the deal had made it through, Kroger and Albertsons would have accounted for around 5,000 stores. At the time, they said it would help them compete with the likes of Amazon and Walmart which had made big plays in the space.
But district Judge Adrienne Nelson said Tuesday afternoon the deal would harm customers. Nelson discounted the Amazon competition aspect, pointing out that grocery stores have a specific role in the consumer landscape and the merger’s impact on competition must not be underestimated.
Albertsons said, “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 has yet to respond to the lawsuit publicly.
In terminating the deal, Albertsons CEO Vivek Sankaran says the company is ready for the next chapter.
“Over the last two years, we have invested in our core business and in new sources of revenue, while enhancing our capabilities through the rollout of new technologies,” he said in a statement.
In the wake of the decision, Albertsons stock opened up 2.5% while Kroger was up just 1%.
For Straight Arrow News, I’m Simone Del Rosario
