Albertsons Cos. is demanding Kroger Co. pay more than $9 billion for the collapse of their proposed $24.6 billion merger, the largest in US grocery history. Lawyers for Albertsons made the demand in Delaware Chancery Court ahead of a trial later this month. The companies' plan to combine was blocked by a federal court in December 2024 after the US Federal Trade Commission argued the divestiture plan was insufficient to address antitrust concerns.
Albertsons alleges Kroger "willfully" breached the merger agreement by failing to use "best efforts" to secure regulatory approval, specifically refusing to alter its plan to divest certain assets. The demand includes a premium stockholders would have received, a $600 million termination fee, $75 million in interest, and additional costs. Albertsons claims Kroger prioritized profit targets over ensuring regulatory approval, sticking to a "failing lowball strategy" despite feedback from regulators and advice from counsel.
Kroger maintains it did everything possible to secure approval and accuses Albertsons of undermining its divestiture proposal. If Albertsons wins, its stockholders would benefit, with Cerberus Capital Management holding a more than 30% stake.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing