Albertsons Sues Kroger After Judge Rules Against Grocery Merger
Albertsons on Wednesday formally terminated its proposed $25 billion merger with Kroger and filed a lawsuit against its supermarket competitor, saying Kroger violated its contract and didn’t follow through on commitments to help get the deal approved. It comes a day after a judge blocked the planned merger. In a news release, Albertsons said Kroger broke its merger agreement “by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers, and failing to cooperate with Albertsons.”
In a statement, Kroger called the allegations in the lawsuit “baseless and without merit.”
Total Retail's Take: While we finally have closure on the potential merger of grocery giants Albertsons and Kroger, the two companies will still be connected as the fallout of the failed transaction begins. As CNBC notes, Albertsons' lawsuit announced Wednesday is akin to a corporate divorce battle. The companies are at odds about who should pay for the legal fees associated with the merger and who, if anyone, is responsible for paying a breakup fee.
Given the seeming schism between Albertsons and Kroger, it's likely best that the two organizations will be going their separate ways following the proposed merger. Alignment on culture and future vision of the combined organization would likely to have been a challenge given all the starts and stops, and points of dispute, during the nearly two-year long merger process. Back to being fierce competitors.
