Kroger, attorneys for Albertsons say, failed to exercise its “best efforts” in securing regulatory approval for the merger. It also allegedly refused to divest assets necessary for antitrust approval, ignored regulators’ feedback, and pre-emptively rejected competitors’ offers to buy Kroger stores that it would have had to sell for the deal to be approved.
The $25 billion merger between Kroger and Albertsons would have been the largest in American history. However, on Wednesday, a federal judge blocked the deal from proceeding. Although the two companies could have filed an appeal, Albertsons pulled its commitment and filed a lawsuit against Kroger, accusing its long-time rival of falling flat in court.
According to CNN, the proposed merger was first announced in 2022.
If approved, it would have combined two of the largest grocery retailers in the United States. Kroger and Albertsons also own an assortment of recognizable brands, including Safeway, Vons, and Fred Meyer.
“Given the recent federal and state court decisions to block our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement,” Albertsons CEO Vivek Sankaran said in a statement on Wednesday. “We are deeply disappointed in the court’s decisions.”
Albertsons also announced that more than a withdrawal from the merger: it is also suing Kroger for breach of contract, alleging that its inaction and general ineptitude led to the deal’s death.
Kroger, attorneys for Albertsons say, failed to exercise its “best efforts” in securing regulatory approval for the merger. It also allegedly refused to divest assets necessary for antitrust approval, ignored regulators’ feedback, and pre-emptively rejected competitors’ offers to buy Kroger stores that it would have had to sell for the deal to be approved.
“Kroger willfully breached the Merger Agreement in several key ways, including by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons,” Albertsons said in recent press release.
Erin Rolfes, a spokesperson for Kroger, issued a firm denial of Albertsons’ claims.
In a statement, Rolfes said that Albertsons’ allegations were not only “without merit,” but suggested that the company had itself breached the merger agreement multiple times.
Instead of accepting responsibility for its role in the failed merger, Rolfes said, Albertsons opted to deflect responsibility by filing suit.
“Kroger looks forward to responding to these baseless claims in court,” she said. “We went to extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process and the facts will make that abundantly clear.”
CNN notes that, even in spite of Kroger’s legal failure, analysts still believe the grocery store is positioned for growth. Kroger’s CEO, Rodney McMullen, echoed these sentiments, saying that his company never let the proposed merger get in the way of routine planning.
“We’ve always made sure that we don’t need to do mergers to make our business successful,” he told CNN. “If it doesn’t happen, we’ll continue to go on.”
Sources
Albertsons Backs Out of Merger Deal and Sues Kroger After Court Rulings
Albertsons calls off merger and sues Kroger
Albertsons gives up on Kroger merger, files lawsuit against grocery chain
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