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Albertsons has filed a lawsuit against Kroger following the collapse of their proposed $25 billion merger, accusing the company of breaching their agreement by failing to secure regulatory approval.
Some shit you should know before you read: Back in 2022, Kroger announced its plans to acquire Albertsons in a $25 billion deal that aimed to create the largest supermarket chain in US history by combining two of the top 10 grocery retailers in the US. The merger faced immediate criticism from regulators, unions, consumer advocates, and small grocery stores, who argued it would harm competition, increase prices for consumers, and negatively impact workers. Those against the merger warned that the merger would reduce options for shoppers and create a monopoly-like entity, undermining smaller competitors. A federal judge in Oregon initially ruled against the deal, finding that it would eliminate critical head-to-head competition between Kroger and Albertsons, which could lead to higher prices and reduced consumer choice.
What’s going on now: Today, Albertsons filed a lawsuit against Kroger, accusing the company of breaching their merger agreement by failing to take adequate steps to secure regulatory approval for the proposed $25 billion deal. The lawsuit alleges that Kroger prioritized its own financial interests over fulfilling its contractual obligations, offering insufficient divestiture plans that ignored concerns raised by regulators. Albertsons claims this misconduct led to the collapse of the merger, causing significant harm to its shareholders, employees, and consumers. The company is seeking billions of dollars in damages for lost shareholder value, legal costs, and the $600 million breakup fee, which Kroger has rejected as unwarranted.
In a statement, Tom Moriarty, Albertsons’ General Counsel and Chief Policy Officer, said, “A successful merger between Albertsons and Kroger would have delivered meaningful benefits for America’s consumers, Kroger’s and Albertsons’ associates, and communities across the country. Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators’ concerns. Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates and consumers. We are disappointed that the opportunity to realize the significant benefits of the merger has been lost on account of Kroger’s willfully deficient approach to securing regulatory clearance.”
Kroger responds: In a statement, a spokesman for Kroger said they refute “these allegations in the strongest possible terms, especially in light of Albertsons’ repeated intentional material breaches and interference throughout the merger process.” They added, “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.”
