Albertsons ends $25 billion merger with Kroger, sues for billions

From Investing.com: 2024-12-11 23:21:07

Albertsons and Kroger have ended their $25 billion merger plan after courts blocked the deal. Albertsons is suing Kroger, seeking billions in damages and a $600 million termination fee. Kroger called the claims baseless and said it will defend against them in court. The merger would have given them the second-biggest share in the U.S. grocery industry.

The deal was blocked due to concerns that it would eliminate competition between traditional grocery chains, leading to higher prices for consumers. Walmart would have remained the top player in the market, with about 17% share. Analysts believe Walmart and other grocery giants are the winners in this scenario, as the merger would have created a formidable competitor.

The U.S. Federal Trade Commission and attorneys general from several states sued to block the deal, arguing that it would decrease competition. Kroger defended the merger, saying it would lower prices at Albertsons stores. Kroger planned to fund price cuts through cost savings from a larger operation and an expanded customer base for its data consulting business.

Despite efforts to save the deal, judges ruled against it, citing concerns about decreased competition. Kroger’s unwillingness to listen to regulators was a key factor in the deal’s demise. Analysts predicted the deal’s termination and believe Kroger will not appeal the decision. Both Albertsons and Kroger announced share buyback programs in the wake of the failed merger.



Read more at Investing.com: Albertsons demands billions from rival Kroger after terminating merger bid By Reuters