Albertsons-Kroger $24B merger collapses, new lawsuit ensues

Albertsons has scrapped its $24.6 billion merger with Kroger following rulings by two courts rejecting the deal this week. The courts in Oregon and Washington sided with the FTC, saying that the acquisition would harm competition, reduce employee wages, and increase prices for consumers.

The decision ends a two-year effort to create the largest supermarket in US history, which would have commanded roughly 13% of the grocery market. The proposed merger would have combined Albertsons’ 2,300 stores with Kroger’s 2,750 and employed around 700,000 workers.

The supermarket giants argued that the merger would help better compete with retailers like Walmart and Amazon.

But now, Albertsons has filed a lawsuit against Kroger, seeking billions in damages, including a $600 million termination fee. It alleges Kroger failed to address regulatory concerns, which blocked the deal by courts.

Kroger denies the claims and blames Albertsons for breaching the agreement.

The failed merger is a win for FTC Chair Lina Khan, who has aggressively pushed against mergers and acquisitions and Big Tech over antitrust grounds.

President-elect Donald Trump’s FTC pick, Andrew Ferguson, promises to reverse what he calls Khan’s “anti-business agenda.” He could favor policies that may be less critical of corporate mergers.

It would be good news to Wall Street, which is seeing a resurgence in mergers, buoyed by $35 billion in deals announced this week.