A federal judge on Tuesday temporarily blocked Kroger’s $24.6 billion acquisition of Albertsons, ruling that the proposed union would reduce competition for grocery shoppers.
A preliminary injunction issued by an Oregon court ruled in favor of the Federal Trade Commission, which had argued that the deal violated antitrust laws.
Neil Saunders, managing director at GlobalData, said the judge’s ruling “effectively ends any chance of a deal happening.” The retail analyst added, “Of all the cases the FTC has brought over the past few years, this one is the most sensitive, involving two giant companies that supply essential goods.” Ta.
February FTC a lawsuit was filed to prevent In proposing the merger, the agency was joined in the lawsuit by eight state attorneys general and the District of Columbia.
“This historic victory protects millions of Americans across the country from soaring prices on essential foods, from milk to bread to eggs, and ultimately “Consumers will be able to put more money in their pockets.” said in a statement. “This victory means the lives of millions of Americans who shop for everyday essentials at grocery stores owned by Kroger and Albertsons, including Fry’s stores in Arizona, Vons stores in Southern California, and Jewel-Osco stores in Illinois. have a direct and visible impact.”
Companies defend deals
Kroger, based in Cincinnati, Ohio, operates 2,750 stores in 35 states and the District of Columbia, including brands such as Ralphs, Smiths and Harris Teeter. Boise, Idaho-based Albertsons operates approximately 2,300 stores in 34 states, including brands such as Safeway, Jewel-Osco and Shaw’s. Together, the companies employ approximately 700,000 people.
The retailers agreed to join forces in October 2022, arguing the union would help them compete with Amazon, Costco, Walmart and other big rivals.
Albertsons expressed disappointment with a judge’s ruling Tuesday that suspended trading and said it was considering legal and strategic options.
In a statement to CBS News, the company said, “We are excited about how the proposed merger will increase competition, lower prices, increase employee wages, protect union jobs and improve the shopping experience for our customers. “I believe I explained this clearly during the process,” he said.
Kroger also said the merger will increase competition in the grocery industry and benefit consumers and employees. The company said in a statement:
“Kroger is disappointed in the opinions issued by the federal district court in Oregon and the state court in Washington. It ignores important evidence presented in court showing that “respecting collective bargaining agreements and determining prices is a policy that protects customers, employees, and broader competition in the rapidly evolving landscape of grocery stores.” It’s in the best interest of the environment. ”
Kroger has pledged to invest $500 million to lower prices once the deal closes. Kroger said it also invested in lower prices when it merged with Harris Teeter in 2014 and Roundy’s in 2016. Kroger also committed to investing $1.3 billion in improvements to Albertsons stores as part of the partnership.
The FTC said the proposed deal would be the largest grocery merger in U.S. history and would eliminate competition for workers and threaten their ability to win higher wages, better benefits, and improved working conditions. Ta.
The International Union of Food and Commercial Workers (UFCW), which represents grocery store and other food industry workers, applauded the court’s decision.
“We are pleased that the court heard the concerns of our hardworking members and rejected the proposed mega-merger between Kroger and Albertsons,” UFCW International President Marc Perrone said in a statement. “The issues we raised were echoed by lawmakers, economists, attorneys general, consumers, and the FTC throughout this process.”
