Kroger and Albertsons are headed to court over the collapse of their $24.6bn supermarket merger, with Albertsons seeking over $9bn in damages. A two-week trial begins Monday, featuring testimony from former Kroger CEO Rodney Mc Mullen and current Albertsons CEO Susan Morris. Albertsons alleges Kroger failed to make required efforts to win regulatory approval, including making 'lowball' offers and refusing to divest better-performing stores.
Kroger denies breach and refuses to pay a $600mn termination fee, claiming Albertsons violated the agreement by declaring a controversial $4bn dividend to shareholders, including Cerberus Capital Management. The merger was blocked in 2024 by the FTC and several states over anti-competitive concerns amid surging inflation, becoming a major win for the Biden administration’s antitrust agenda under Lina Khan. Regulators argued the deal would raise prices and weaken union bargaining power.
The companies had pledged to sell 579 stores to address concerns, but judges ruled the tie-up anti-competitive. Albertsons claims Kroger ignored regulatory advice, including an FTC 'Christmas List' of assets to divest, and wanted the merger only on its own terms. Billions hang in the balance of one of Wall Street’s highest-stakes legal fights.
Source: Financial Times Companies · Summarized by HeadlinesBriefing