Albertsons Abandons Kroger Merger, Files Lawsuit Alleging Breach of Agreement

Albertsons Abandons Kroger Merger, Files Lawsuit Alleging Breach of Agreement

Grocery Giant Accuses Kroger of Failing to Secure Regulatory Approval for $24.6 Billion Deal After Judges Block Merger

Albertsons has officially abandoned its proposed merger with Kroger and is suing the grocery chain, accusing it of failing to secure regulatory approval for the $24.6 billion deal.

The announcement came one day after two judges issued rulings that effectively halted the merger. U.S. District Court Judge Adrienne Nelson issued a preliminary injunction Tuesday following a three-week hearing in Portland, Oregon, while Judge Marshall Ferguson in Seattle issued a permanent injunction, citing reduced competition and violations of consumer protection laws in Washington state.

Merger History and Regulatory Challenges

Proposed in 2022, the Kroger-Albertsons merger aimed to create the largest grocery store chain in U.S. history, allowing the companies to better compete with retail giants like Walmart, Costco, and Amazon.


To address antitrust concerns, the companies agreed to sell 579 stores in overlapping markets to C&S Wholesale Grocers. However, the Federal Trade Commission (FTC) opposed the deal, arguing it would lead to higher grocery prices, reduced wages, and insufficient competition. The FTC also criticized C&S as “ill-equipped” to manage the divested stores.

Albertsons’ Lawsuit Against Kroger

In its lawsuit, Albertsons accused Kroger of breaching the merger agreement by failing to take necessary steps to secure regulatory approval. Albertsons claimed Kroger ignored regulators’ feedback, refused stronger divestiture options, and prioritized its own interests over the agreement.

“Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates, and consumers,” said Tom Moriarty, Albertsons’ general counsel.

Kroger’s Response

Kroger rejected the allegations, stating that Albertsons was responsible for “repeated intentional material breaches and interference throughout the merger process.” The company maintained it had acted in good faith to pursue the merger.

Financial Market Reaction

Following the announcement, Albertsons’ stock rose by more than 2% at the opening bell, while Kroger’s stock saw a modest increase.

Implications for the Grocery Industry

The collapse of the Kroger-Albertsons merger marks a major development in the grocery sector, which has been grappling with increased competition from Walmart, Amazon, and discount chains like Aldi. The failed deal underscores the heightened scrutiny of antitrust enforcement and its impact on corporate consolidation.

Albertsons’ lawsuit against Kroger signals a contentious end to the merger saga, raising questions about the future strategies of both companies as they navigate an increasingly competitive retail landscape.