Albertsons is refusing to merge with Kroger and suing the grocery chain, saying it didn’t do enough to get regulatory approval for the $24.6 billion deal.
The move came the next day two judges stopped the merger in separate courts. U.S. District Court Judge Adrienne Nelson issued a preliminary injunction blocking the merger on Tuesday. three week hearing in Portland (Oregon). An hour later, Judge Marshall Ferguson of Seattle issued a permanent injunction against the merger in Washington, after concluding that it would reduce competition in the state and violate consumer protection laws.
Kroger and Albertsons proposed in 2022 what it would be the largest grocery store merger in US history. The companies said a merger would help it compete with big retailers like Walmart, Costco and Amazon.
Under the merger agreement, Kroger and Albertsons—which compete in 22 states—agreed 579 stores sold where their locations overlap C&S Wholesale groceriesThe New Hampshire-based supplier of independent supermarkets also owns the Grand Union and Piggly Wiggly store brands.
But the Federal Trade Commission sued to block the merger earlier this year, saying it would eliminate competition, raise prices and lower workers’ wages. He also said that the divestment plan was inadequate and C&S was ill prepared to accommodate so many stores.
On Wednesday, Albertsons said Kroger did not use “best efforts” and did not take “any action” to secure approval of the merger transaction agreed to by the companies.
Albertsons said Kroger refused to divest assets required for antitrust approval, ignored regulators’ advice and rejected more powerful divestiture buyers.
Kroger willfully violated the Merger Agreement in a number of ways, including repeatedly refusing to divest assets required for antitrust approval, ignoring regulatory input, rejecting stronger divestiture buyers, and failing to cooperate with Albertsons.
“Kroger’s own conduct, at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, partners and consumers,” Albertsons General Counsel Tom Moriarty said in a statement.
Kroger said it disagrees with Albertsons “in the strongest possible terms.” It said early Wednesday that Albertsons was “responsible for the repeated and intentional material breach and interference throughout the merger process.”
Shares of Albertsons rose more than 2% at the opening bell, while shares of Kroger rose slightly.
