On Wednesday, Albertsons canceled its $24.6 billion merger with Kroger and initiated a lawsuit against the larger grocery chain. This action followed a federal judge in Oregon and a state judge in Washington blocking the merger, citing concerns over reduced competition. Albertsons accuses Kroger of failing to secure regulatory approval for their 2022 agreement.
The Federal Trade Commission, along with seven states, including Oregon, had already moved to halt the merger earlier in the year. Judges in Portland and Washington state agreed with regulators that the merger would diminish competition, leading to higher prices and lower-quality products for consumers and reduced wages for grocery workers.
Albertsons has filed a complaint in the Delaware Court of Chancery, alleging Kroger “willfully breached” the agreement by not addressing regulatory feedback, refusing to divest necessary assets, and failing to cooperate. Kroger, owning multiple Fred Meyer and QFC locations in Oregon, had planned to sell 579 stores nationwide, but regulators remained unconvinced by this move.
Tom Moriarty, Albertsons’ general counsel, criticized Kroger, stating the merger could have benefited consumers but was undermined by Kroger’s financial interests. Albertsons is seeking a $600 million termination fee and additional damages for lost shareholder value.
Kroger refuted Albertsons’ allegations as “baseless,” claiming Albertsons breached the agreement repeatedly and interfered with the merger process. Kroger asserted it upheld the merger agreement throughout regulatory proceedings, anticipating proving their stance in court.
Oregon officials, including Attorney General Ellen Rosenblum and U.S. Sen. Ron Wyden, praised the merger’s collapse. Wyden expressed relief that Oregonians avoided potential price hikes and challenges in accessing pharmacies, emphasizing the need for fair wages and conditions for grocery workers.
This story was originally produced by the Oregon Capital Chronicle, a part of States Newsroom, a nonprofit news network.
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