Albertsons demands Kroger pay over $9 billion amid failed merger

Albertsons Cos. is demanding over $9 billion from Kroger Co. following the failure of their proposed merger, which would have formed the largest U.S. grocery chain. The case is set for trial in a Delaware Chancery Court two weeks from now. The $24.6 billion deal was blocked by a federal court in December 2024. In today's court filing, Albertsons claims Kroger deliberately breached the merger agreement by failing to exert maximum effort to secure regulatory approval.

They assert that Kroger refused to adjust its asset divestiture plan. The requested sum of more than $9.3 billion encompasses the additional stockholders would have earned if the merger had gone through, a $600 million termination fee, $75 million in interest, and extra expenses. According to Albertsons, Kroger was supposed to eliminate any antitrust barriers to the merger, with the only restriction being Kroger's prohibition on selling more than 650 stores.

Kroger is accused of breaking an essential promise, as stated by Albertsons. Kroger should be held responsible for the harm inflicted on shareholders, employees, and customers, and the company is eager to prove its case in court. The merger was expected to bolster competition against Amazon.com Inc., Walmart Inc., and other non-unionized competing businesses.

To gain regulatory approval, the companies agreed to offload numerous stores to C&S Wholesale Grocers Inc. However, a federal judge dismissed the deal in December 2024, favoring the U.S. Federal Trade Commission, which contended that the divestiture plan did not sufficiently address antitrust issues. Albertsons terminated the deal and filed a lawsuit against Kroger, arguing that the company acted willfully by not complying with the merger agreement by refusing to divest the requisite assets.

Albertsons contends that Kroger prioritized profit over securing regulatory approval. In response, Kroger maintains that it made all reasonable attempts to obtain approval and accuses Albertsons of undermining its divestiture proposal to regulators. Kroger claims that Albertsons covertly collaborated with C&S to pressure regulators into mandating Kroger to sell more stores than necessary.

C&S denies all allegations and asserts that their interactions with Kroger, Albertsons, and regulators were in full compliance with contractual, legal, and ethical standards, all aimed at securing regulatory approval.