Albertsons announced that it has filed a lawsuit against Kroger, alleging that it did not exercise “best efforts” or take “all necessary actions” to secure regulatory approval of the proposed $24.6 billion deal. ) between companies.
In a statement, Albertsons said it is seeking “billions of dollars in damages from Kroger to compensate Albertsons and its shareholders.” In addition to a termination fee of US$600 million (R$3.6 billion), the supermarket chain wants compensation for the “several years and hundreds of millions of dollars it dedicated to obtaining approval for the merger”.
Albertsons shares rose 1% at 9:50 am New York time this Wednesday (11). Kroger shares rose 1.8%.
In a statement, Kroger said Albertsons’ allegations are baseless and without merit. The company added that Albertsons is not entitled to the merger termination fee and that it is seeking to “deflect liability following Kroger’s written notice of Albertsons’ multiple breaches of the agreement.” Kroger’s board is evaluating next steps for the company.
Kroger and Albertsons had agreed to the merger in October 2022, saying it would help them better compete against Amazon.com, Walmart and other larger, non-union competitors. The merger would have united Kroger, the nation’s largest grocery company, with Albertsons, the second largest, creating a company with more than 4,000 stores in 48 states and Washington, DC.
The Federal Trade Commission (FTC) sued to block the deal in February, arguing that it violates US antitrust laws and that the sale of hundreds of stores to C&S Wholesale Grocers would not be enough to replace lost competition.
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A federal judge blocked the deal on Tuesday, siding with the FTC and arguing it would reduce competition and raise prices for U.S. consumers. A Washington judge in Seattle also blocked the deal in that state.
Albertsons said Wednesday that Kroger “intentionally” violated the merger agreement by refusing to divest assets needed for antitrust approval, ignoring feedback from regulators and rejecting stronger divestiture buyers, among other reasons.
Boise, Idaho-based Albertsons said it was exercising its right to terminate the agreement. CEO Vivek Sankaran said Albertsons is disappointed and starting a new chapter with a strong track record after expanding its core business and other areas. This includes investments in stores, technology and employees, as well as expanding its online business.
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The company expects comparable sales to grow 1.8% to 2.2% in fiscal 2024. It will provide more details on its future plans by January, when it releases quarterly results.
Albertsons and C&S declined to comment.
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