Albertsons announced on Wednesday it is suing Kroger after a federal judge issued a preliminary injunction to prevent the Kroger Company from acquiring Albertsons on Tuesday.
Albertsons says that Kroger failed to make a "good faith" effort to secure the merger. The company also said that Kroger harmed Albertsons' shareholders and employees by not securing the merger.
"A successful merger between Albertsons and Kroger would have delivered meaningful benefits for America's consumers, Kroger’s and Albertsons’ associates, and communities across the country. Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators’ concerns," said Albertsons’ general counsel Tom Moriarty.
The two chains first announced a proposed merger in October 2022. The companies had set early 2024 as a target to complete the merger, but the Federal Trade Commission sued to block the move. The FTC alleged that the deal was "anticompetitive" and would lead to higher prices and fewer options for consumers.
"The FTC, along with our state partners, scored a major victory for the American people, successfully blocking Kroger’s acquisition of Albertsons. This historic win protects millions of Americans across the country from higher prices for essential groceries—from milk, to bread, to eggs—ultimately allowing consumers to keep more money in their pockets," FTC Bureau of Competition Director Henry Liu said.
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Albertsons said it is seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole.
Kroger said it denies Albertsons' claims.
“Albertsons’ claims are baseless and without merit," a Kroger spokesperson said. "Kroger refutes these allegations in the strongest possible terms, especially in light of Albertsons’ repeated intentional material breaches and interference throughout the merger process."
The spokesperson added that Kroger went to "extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process and the facts will make that abundantly clear."
RELATED STORY | Federal judge temporarily halts Kroger and Albertsons proposed merger
The two companies hold a combined 5,000 locations throughout the U.S. If the merger had been allowed to proceed, Kroger would have operated 4,414 locations throughout the U.S. after unloading nearly 600 stores.
