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The
federal court in Washington D.C. denied issuing a restraining
order in the case, which was filed by the attorneys general of
California, Illinois and Washington D.C and sought to block the
payout until antitrust reviews of the proposed merger were
completed.
However, the payment remained blocked as a state court in the
state of Washington last week barred Albertsons from paying the
special dividend until Nov. 10, saying that it would weaken its
ability to compete as the antitrust reviews go on.
A hearing on that case is scheduled for Nov. 10.
"By eliminating its cash-on-hand and nearly doubling its debt,
Albertsons will be in a weakened competitive position relative
to Kroger, thereby harming grocery consumers and workers
throughout Washington," State Court Commissioner Henry Judson
wrote in issuing that temporary restraining order.
The lawsuit filed by attorneys general of Washington D.C.,
California and Illinois argued the same.
Kroger snapped up Albertsons in a $25 billion deal in last
month's mega merger between the No. 1 and 2 standalone grocers
to better compete against U.S. grocery industry leader Walmart
Inc on prices.
Last week, 26 organizations, including the retailers' biggest
unions and antitrust experts called on the FTC to block the
merger, saying it would exacerbate inequality through job losses
and eroding wages at a time of high inflation.
"People living in poverty will suffer most of all—not only
because of skyrocketing prices as competition vanishes, but
through probable store closures," the groups said, adding the
"unusual" $4 billion dividend to shareholders should be
investigated.
Albertsons continued to call the lawsuits "meritless," on
Tuesday, and reiterated that it had limited debt and significant
free-cash flow and was in a strong position financially.
(Reporting by Shubham Kalia and Ann Maria Shibu in Bengaluru;
Editing by Aurora Ellis)
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