Grocery chain Albertsons has dropped its $25 billion merger plan with Kroger after a federal judge blocked the deal on Tuesday. The company claims that Kroger failed to adequately push for regulatory approval, leading to the decision to terminate the agreement.
A federal and state court decision blocked the deal over concerns that combining the companies would reduce competition and raise prices. Albertsons had argued that the merger was necessary to compete with giants like Walmart and Amazon, but regulators said it would erode bargaining power of unions and harm employees.
Albertsons has sued Kroger in Delaware Court of Chancery for billions of dollars in damages, accusing Kroger of not exercising “best efforts” to secure regulatory approval. The lawsuit claims that Kroger breached the merger agreement multiple times.
The supermarket chains spent hundreds of millions of dollars on the deal, which would have created a $200 billion company with 5,000 supermarkets across the country. However, regulators argued that consolidating the two chains would reduce head-to-head competition in over 1,000 communities, resulting in higher prices and lower quality.
Shares of Albertsons fell 1.5 percent on Wednesday, while Kroger’s stock rose 1 percent.
Source: https://www.nytimes.com/2024/12/11/business/albertsons-kroger-merger-deal.html