US FTC suing to block $25 billion Kroger-Albertsons supermarket deal
By David Shepardson and Chris Sanders
WASHINGTON (Reuters) -The U.S. Federal Trade Commission and eight states said on Monday they are suing to block supermarket chain Kroger (NYSE:KR)'s $24.6 billion deal to buy smaller rival Albertsons (NYSE:ACI), saying it would boost grocery prices for millions of Americans.
The deal, which would create a grocery empire with more than 4,000 stores, has drawn tough scrutiny from lawmakers and consumer groups worried about higher grocery prices, job losses, store closures and diminishing choice for consumers.
U.S. food prices have risen by 25% over the last four years, and while food inflation is showing signs of cooling off in 2024, grocery bills have become a growing concern for shoppers.
The deal would strengthen Kroger's position as the second largest player in the US grocery market behind Walmart (NYSE:WMT).
The FTC's lawsuit deal comes at a time when the Biden administration has pressed for lower grocery prices and pushed back against big-ticket mergers that risk price hikes, affecting consumers in areas ranging from medicines to airline tickets.
The White House, after FTC suit was announced, said President Joe Biden believes large corporations must be checked by healthy competition.
Shares of Kroger were trading 1.7% lower. Albertsons stock rose 0.6%.
While the FTC charged the deal will eliminate «fierce competition between Kroger and Albertsons,» Kroger defended their business model, saying it has reduced prices every year since 2003 and would be applied to the merged company.
The FTC's legal efforts «only strengthens larger, non-unionized retailers like Walmart WMT.N>, Costco (NASDAQ:COST) COST.O> and Amazon.com (NASDAQ:AMZN) by allowing them to further increase their
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