Kroger and Albertsons agreed on Thursday to temporarily suspend their proposed $25 billion merger as regulators continue to pursue legal challenges to try to block the deal.
The two companies have agreed to a temporary order that will put the merger on hold until a Colorado lawsuit is resolved. This move eliminates the need for an injunction preliminary hearing scheduled for next month.
The trial will begin on September 30. My office is looking forward to presenting the case that the merger will eliminate competitiveness and have an impact on food prices, consumer choice, and jobs,” Colorado Attorney-General Phil Weiser stated in a press release.
A Kroger spokesperson spoke on behalf of both companies. “Today’s ruling is welcome news, as it eliminates a Colorado preliminary injunction that was scheduled to start August 12,” the spokesperson stated. We look forward to arguing in court that the merger of Kroger with Albertsons will result in meaningful and measurable benefits for families all over the country, including lower prices, more choices, and stable and well-paying jobs for union workers.
To help gain regulatory approval, the two companies agreed to sell almost 600 stores to C&S Wholesale Grocers. They also released a list recently of the stores that would be involved in the merger. This would be the biggest merger in the grocery industry’s history.
Albertsons and Kroger announced initially in September 2023, that 413 stores will be sold. In April, they increased this number by 166 as part of a larger and updated divestiture. Kroger and Albertsons would also partner with six distribution centers, a milk plant, certain brands, and non-store assets as part of the plan.
Kroger CEO Rodney McMullen stated in April that this plan was designed to ensure that “no stores would close as a consequence of the merger, that all frontline employees will remain employed, and that existing collective bargaining will continue. Associates will also continue to receive industry-leading health care and pension benefits along with bargained-for wages.”
The critics of the proposed merger are concerned that it will result in the closure of grocery stores, reduce access for consumers to essentials, and eliminate jobs. It could also increase the prices of food and other products at supermarkets.
Colorado was the second State to sue to block the deal. Washington State had done so in January. The Federal Trade Commission, along with eight other States, filed their suit at the end of February.