Albertsons said Wednesday that it has terminated a $25 billion merger agreement with Kroger and will sue the grocery giant, alleging the company didn’t do enough to get the deal done.
Judges in Washington and Oregon on Tuesday blocked the deal, delivering a win to federal regulators and consumer advocates who argued the merger could harm competition, consumers and workers and push prices up.
“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,” said Tom Moriarty, Albertsons’ general counsel and chief policy officer.
Kroger called Albertsons’ claims “baseless and without merit.”
“Kroger refutes these allegations in the strongest possible terms, especially in light of Albertsons’ repeated intentional material breaches and interference throughout the merger process,” Kroger said in a statement.
“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.”
A Kroger spokesperson declined to share additional details on the allegations levied in their statement. Albertsons declined to comment beyond the press release.
The merger abandonment is a major win for the Federal Trade Commission, which has pursued an aggressive antitrust agenda.
Joined by nine attorneys general, the regulator sued to block the proposed merger in February, saying the “largest proposed supermarket merger in U.S. history” would hurt competition and workers and result in higher prices.
The White House and consumer advocates celebrated the judges’ decision.
“The Kroger-Albertsons merger would have been the biggest supermarket merger in history—raising grocery prices for consumers and lowering wages for workers. Our Administration is proud to stand up against big corporate mergers that increase prices, undermine workers, and hurt small businesses,” said Jon Donenberg, deputy director of the National Economic Council.
