Albertsons gives up on Kroger merger, sues grocery chain for failing to secure deal
Kroger and Albertsons’ plan for the largest U.S. supermarket merger in history has crumbled
Kroger and Albertsons' plan for the largest U.S. supermarket merger in history crumbled Wednesday, with Albertsons pulling out of the $24.6 billion deal and the two companies accusing each other of not doing enough to push their proposed alliance through.
Albertsons said it had filed a lawsuit against Kroger, seeking a $600 million termination fee as well as billions of dollars in legal fees and lost shareholder value. Kroger said the claims were “baseless” and that Albertsons was not entitled to the fee.
The bitter breakup came the day after two judges halted the proposed merger in separate court cases. U.S. District Court Judge Adrienne Nelson in Oregon issued a preliminary injunction Tuesday blocking the merger until an in-house judge at the Federal Trade Commission could consider the matter.
An hour later, Superior Court Judge Marshall Ferguson in Seattle issued a permanent injunction barring the merger in Washington state. Ferguson ruled that combining Albertsons and Kroger would lessen competition and violate consumer-protection laws.
The companies could have appealed the rulings or proceeded to the in-house FTC hearings. Albertsons' decision to instead pull out of deal surprised some industry experts.
“I’m in a state of professional and commercial shock that they would take this scorched earth approach,” said Burt Flickinger, a longtime analyst and owner of retail consulting firm Strategic Resource Group. “The logical thing would have been for Albertsons to let the decision sink in for a day and then meet and see what could be done. But the lawsuit seems to make that a moot issue.”
Albertsons is unlikely to find another
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