Login
Sign Up

Federal judge blocks Kroger’s $25 billion mega-merger with Albertsons

  • CNN
  • December 10, 2024
New York

CNN

 — 

A federal judge in Oregon blocked Kroger's proposed $25 billion merger with Albertsons, ruling that the deal would limit competition in the grocery industry and harm consumers.

The merger, announced in 2022, sought to combine the fifth and tenth largest retailers in the country. The companies own dozens of grocery chains, including Safeway, Vons, Harris Teeter and Fred Meyer.

Kroger and Albertsons employ mostly unionized workforces and said they wanted to merge to be more competitive against non-union giants such as Walmart, Amazon and Costco. The grocers also face increased pressure from Aldi, the fast-growing German discount supermarket chain.

The merger would accelerate "our position as a more compelling alternative to larger and non-union competitors," Kroger CEO Rodney McMullen said when the deal was announced in 2022. Kroger committed to lowering grocery prices by $1 billion following the merger.

But the proposal came as food prices skyrocketed. Unions, small grocers and a coalition of Democrats and Republicans on Capitol Hill, including Democratic Sen. Elizabeth Warren of Massachusetts and Republican Sen. Mike Lee of Utah, also strongly opposed the merger from the start.

The Federal Trade Commission in February sued to block the deal.

The FTC said the merger will "result in higher grocery prices for millions of Americans and lower wages and benefits for hundreds of thousands of grocery workers."

To allay competition concerns, Kroger and Albertsons agreed to divest 579 stores to C&S Wholesale Grocers. But the FTC said C&S was "ill-equipped" to run the divested stores and it could turn into a "non-functioning disaster."

The case was watched closely because of its implications for future antitrust enforcement and corporate dealmaking. The FTC under chair Lina Khan has also launched landmark antitrust suits against Google, Amazon and other tech giants.