Albertsons Abandons Merger and Initiates Lawsuit Against Kroger – One America News Network
OAN Staff James Meyers
11:07 AM – Wednesday, December 11, 2024
A federal judge in Oregon has halted a $25 billion move by Kroger to merge with rival Albertsons, agreeing with the Federal Trade Commission’s apprehensions regarding the merger’s potential impact on market consolidation.
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Judge Adrienne Nelson stated on Tuesday that a merger between these two corporations would likely harm consumers.
“We have made the difficult decision to terminate the merger agreement,” said Albertsons CEO Vivek Sankaran in a statement on Wednesday.
Judge Nelson noted that the two companies “engage in substantial head-to-head competition, and the proposed merger would eliminate that competition.” Consequently, the merger is likely to result in outcomes that would “unilaterally” harm consumers and is considered “presumptively unlawful.”
Initially, the merger aimed to consolidate the eighth and tenth largest retail chains in the U.S., with the companies owning numerous grocery brands including Safeway, Fred Meyer, Vons, and Harris Teeter.
Additionally, Albertsons has filed a lawsuit against Kroger for allegedly breaching their contract, claiming that Kroger failed to exert “best efforts” and take necessary actions to secure regulatory approval for the merger.
Albertsons expressed its disappointment with the U.S. District Court’s decision to grant the FTC’s request for a preliminary injunction.
“We believe we clearly outlined during the proceedings how the proposed merger would enhance competition, lower prices, increase employee wages, protect union jobs, and improve the customer shopping experience. We are carefully reviewing the Court’s opinion and are evaluating our options in line with the merger agreement,” it stated.
While Kroger and Albertsons argued that the merger would decrease prices for consumers, critics contended that it would likely lead to higher prices for shoppers.
Notably, shares of both Kroger and Albertsons rose on Wednesday, with Albertsons announcing plans to repurchase up to $2 billion worth of its own stock.
Currently, Kroger stands as the largest grocery chain in the United States.
Kroger CEO Rodney McMullen remarked last week that the company is well-positioned for growth even without the merger.
“We’ve always ensured that we are not reliant on mergers to achieve business success,” he stated. “If it doesn’t happen, we’ll continue to move forward.”
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