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Kroger and Albertsons face lawsuits to block $24.6bn merger – Bloomberg

February 25, 2024
Consumer Packaged Goods

Amidst brewing tensions, the US Federal Trade Commission (FTC) and a coalition of states are poised to take legal action as early as next week, aiming to prevent grocery giant Kroger’s $24.6 billion acquisition bid for Albertsons, Bloomberg reported.

With the looming expiration of a non-closure agreement between the FTC and the involved parties (on Wednesday 28 February), anticipation mounts as reports indicate an imminent lawsuit to stop the deal before this deadline.

According to Bloomberg, the two companies are currently in the process of arranging a conclusive meeting with the FTC, aiming to dissuade the agency from pursuing legal action against their merger.

A company spokesperson for Kroger said: “Kroger remains in ongoing discussions with the FTC and state regulators. This merger is the best thing for America’s consumers because it will lead to lower prices and more choices on the foods customers need, want and love.”

They continued: “Blocking the combination will only embolden large, non-unionised retailers – like Walmart, Amazon and Costco – to continue opposing unions and leaving communities. Kroger will continue to lower prices, grow good-paying union jobs and increase access to fresh food for the families who need it most.”

Albertsons said it was “continuing to work closely with the FTC. This merger will expand competition, lower prices, protect union jobs and enhance customers’ shopping experience.”

Colorado and Washington have taken legal action by filing lawsuits to halt the merger, due to concerns around antitrust issues, including potential price hikes for consumers, store closures and job losses.

In a recent update, both companies announced a need for additional time to finalise the merger. This delay is attributed to the ongoing investigation by the FTC.

In September, Kroger and Albertsons announced plans to sell 413 stores to C&S Wholesale Grocers. The divestiture plan fulfilled the commitments both businesses set out in their original merger agreement last year concerning divesting stores, including extending a competitor to new geographies through the sale of stores to a well-capitalised buyer that is led by seasoned operators with a strong balance sheet and a sound business plan; ensuring that no stores will close as a result of the merger; maintaining all current collective bargaining agreements, which include industry-leading healthcare and pension benefits, bargained-for wages, and ensuring frontline associates remain employed; and committing to invest in associates and stores for the long term.

The two grocery giants initially revealed their merger plans in 2022. However, in response to growing opposition, they have pushed back the anticipated closure date from early this year to August.

Source: foodbev.com

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