Albertsons sued Kroger after a U.S. judge blocked the supermarket giant's merger, alleging that Kroger failed to use “best efforts” and take “all actions” to obtain regulatory approval.
In addition to a $600 million termination fee, Albertsons is seeking “billions of dollars in damages from Kroger to put Albertsons and its stockholders in a healthy state,” citing years wasted after the failed deal. and is seeking millions of dollars in relief. the company said.
Albertsons announced that it had terminated the contract.
in statementKroger said the chain's claims are “baseless” and “without merit.”
The grocery chain says Albertsons' lawsuit, filed in Delaware Court of Chancery, is an attempt to avoid liability after Kroger notified Albertsons of its breach of contract.
Albertsons stock was down 0.1% Wednesday afternoon, while Kroger stock was up 1.4%.
Albertsons said Kroger “willfully” violated a $25 billion merger agreement that would have created the largest grocery chain in the United States.
The company said Kroger refused to sell assets required for antitrust approval, ignored feedback from regulators and failed to cooperate with Albertsons.
“Kroger acted in its own financial interest rather than fulfilling its contractual obligation to ensure the success of the merger,” Tom Moriarty, general counsel and chief policy officer for Albertsons, said in a statement. “The company was disappointed,” he said, adding that the company was disappointed.
The two companies have agreed to merge in October 2022.
Kroger, the nation's largest grocery company, and Albertsons, the second largest, were supposed to merge to create a chain with nearly 5,000 stores in 48 states and Washington, D.C.
The Federal Trade Commission filed an antitrust lawsuit in February seeking to block the deal, arguing that the plan to sell 579 stores to C&S Wholesale Grocers for $2.9 billion is insufficient to maintain competition. did.
Kroger and Albertsons have argued that the merger will lower prices and allow them to compete with global conglomerates like Amazon and Walmart, but FTC Chair Lina Khan said the grocery merger could lead to even higher prices. He claimed that there was.
“Even if those efficiencies occur, if companies are not checked by competition, there will be no incentive to pass those benefits on to consumers because they may have nowhere else to go.” she said in september.
A federal judge agreed Tuesday that the merger would eliminate direct competition and block the deal.
