US supermarket giant Albertsons has formally terminated its proposed $25 billion merger with fellow operator Kroger after a judge blocked the deal on Tuesday. The move comes as Albertsons filed a lawsuit against Kroger, accusing it of violating their contract and failing to follow through on commitments to secure regulatory clearance.
Albertsons claims that Kroger broke its merger agreement by refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, and rejecting stronger divestiture buyers. The company is seeking $600 million in termination fees and “relief” for the time it spent trying to obtain approval for the merger.
Kroger has denied the allegations, calling them “baseless and without merit.” The company claims that Albertsons is attempting to deflect responsibility and seek payment of a break fee to which they are not entitled. A corporate divorce battle is unfolding over who should pay for legal fees associated with the merger and whether anyone is responsible for paying a breakup fee.
The deal would have combined nearly 40 supermarket chains under a single company, fending off competition from Walmart, Amazon, and Costco. Shares of both companies rose in early trading on Wednesday following the news.
Source: https://www.cnbc.com/2024/12/11/albertsons-sues-kroger-after-judge-rules-against-grocery-merger.html