Albertsons Wants $9.3 Billion From Kroger for Blowing Up Their Merger
With the failed grocery mega-merger headed to trial, Albertsons says Kroger never tried hard enough to get the deal past regulators, and it wants $9.3 billion to show for it.
The breakup was bad enough. Now Albertsons wants to be paid for it. The grocer is seeking more than $9.3 billion from Kroger over their collapsed $24.6 billion merger, with a two-week trial before Judge Lori Will in Delaware Chancery Court expected to start later this month.
The number breaks down into the additional value Albertsons shareholders would have received had the deal closed, a $600 million termination payment, and roughly $75 million in interest and related expenses. Albertsons' argument is that Kroger breached the merger agreement by not doing enough to win regulatory approval, specifically around its plan to sell hundreds of stores to C&S Wholesale Grocers to address antitrust concerns. Albertsons says the contract never required divesting more than 650 stores, and that Kroger's divestiture strategy was inadequate despite warnings from both regulators and its own advisers. It wants the court to find that Kroger deliberately violated the agreement.
Kroger, unsurprisingly, sees it differently. The company denies wrongdoing and says it pursued all reasonable options, while accusing Albertsons of undermining the divestiture through its own communications with C&S, allegedly to push regulators into demanding even more store sales. C&S disputes any improper conduct, saying its communications were consistent with its legal, ethical, and contractual duties.
The merger died after a December 2024 federal court decision sided with the FTC, which argued the deal would reduce grocery competition and that the proposed divestitures fell short. Albertsons terminated the agreement and sued.
The timing is rough for Albertsons either way. The company cut its annual sales and earnings forecasts in July after a sharp first-quarter profit drop, sending its shares down more than 20%. CEO Susan Morris has pointed to Walmart and Amazon as the real competitive threat pulling customers away, which makes the $9.3 billion ask less about punishing Kroger and more about recouping ground Albertsons feels it lost twice over: once to regulators, and once to a merger partner that walked away.
Source: PYMNTS
Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →
