Coalition Sues To Halt Kroger Albertson’s Deal

Litigation is underway to block the proposed $24.6B acquisition of Albertsons by Kroger Company, including a lawsuit filed by nine state attorneys general and the Federal Trade Commission, according to an article by Troutman Pepper. 

The suit, filed in U.S. District Court for the District of Oregon, asks for a preliminary injunction. It argues that the acquisition would eliminate competition and lead to higher grocery prices. The FTC also filed an administrative complaint against Kroger and Albertsons to block the proposed transaction.

Kroger and Albertsons previously offered to sell more than 400 stores to C&S Grocers to lessen competition concerns. According to the FTC, the divestiture wouldn’t be enough to make C&S a real competitor for Kroger’s post-acquisition market share.

AGs in Washington and Colorado announced separate legal challenges to the proposed merger. The Washington suit alleges violation of the state’s Consumer Protection Act. Colorado cites its Antitrust Act. Additionally, the Colorado suit claims Kroger and Albertsons improperly entered into no-poach and no-solicitation agreements following a strike at stores owned by Kroger.

Washington’s Attorney General argues that the merger would create what amounts to a one grocer-monopoly in the state, despite the divestiture. If the deal were approved, it would be the second major retail grocery store merger in Washington recently. The first was the 2015 merger of Albertsons and Safeway.

Henry Liu, director of the FTC’s Bureau of Competition, said that grocery store workers would also be affected, “facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”

The courts may stay the state’s lawsuits pending the outcome of the FTC’s administrative complaint. If the Washington and Colorado suits continue and are successful, it could have a nationwide impact, and possibly cause the grocery companies to abandon the merger.