Kroger blames Albertsons for merger's
demise in new court filings
[March 26, 2025]
By DEE-ANN DURBIN
Kroger is
denying Albertsons’ claims that it didn’t do enough to ensure regulatory
approval of the companies’ planned supermarket merger.
In court papers filed Tuesday in the Delaware Court of Chancery, Kroger
said Albertsons disregarded the companies’ merger agreement and worked
secretly with a partner, C&S Wholesalers, to try to force Kroger to
divest more stores to C&S.
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Shoppers head into an Albertson's grocery store Saturday, Nov. 23, 2024,
in Cheyenne, Wyo. (AP Photo/David Zalubowski, File) |
Kroger also claimed that Albertsons was secretly planning to sue
Kroger if the deal didn’t go through long before the merger
actually fell apart in December. Kroger said in Tuesday's court
filing that it should not be forced to pay Albertsons a $600
million termination fee as well as billions of dollars in legal
fees.
In a statement Tuesday, Albertsons said it was Kroger that
failed to honor the merger agreement.
“Kroger’s self-interested conduct doomed the merger, and we are
now focused on returning value to Albertsons’ shareholders to
compensate for those losses,” Albertsons said.
Kroger and Albertsons first proposed the merger in 2022. They
argued that combining would help them better compete with big
retailers like Walmart and Costco.
But the Federal Trade Commission and two states — Washington and
Colorado — sued to block the merger last year, saying it would
raise prices and lower workers’ wages by eliminating
competition. It also said Kroger and Albertsons' plan to divest
579 stores C&S Wholesalers was inadequate to ensure competition,
since C&S was ill-equipped to take on so many stores.
In December, judges in Washington and Oregon halted the merger
in two rulings issued within hours of each other.
Kroger said even after lower courts ruled, it believed the
merger still had a chance of going through. Kroger said it told
Albertsons it was planning to re-engage with the FTC after
President Donald Trump's election because it thought the FTC
under Trump would be less hostile to mergers.
But instead, Albertsons filed a lawsuit against Kroger the day
after the lower court rulings. Albertsons said Kroger refused to
divest more stores, even as it became clear that regulators
weren't satisfied with its plans. Albertsons said Kroger also
should have sought other buyers beyond C&S to satisfy
regulators' concerns.
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