Timothy Inklebarger, Editor | March 25, 2025
The Cincinnati-based grocery chain said Albertsons began lawsuit plans early
Kroger is punching back in its legal fight with would-be merger partner Albertsons, arguing that it fought hard to convince federal regulators that the deal would be good for consumers.
The Cincinnati-based grocery giant released a statement on Tuesday accusing Albertsons of working secretly with its divestiture partner, C&S Wholesale Grocers, to pressure the grocer to increase the number of stores it planned to divest to C&S.
“As detailed in the court filing, while Kroger was working diligently to seek regulatory approval and close the merger, Albertsons was engaging in a secret and misguided campaign, together with C&S Wholesale Grocers, the divestiture buyer, to pursue its own regulatory strategy, which ultimately undermined Kroger’s efforts,” the grocer said in the press release.
Kroger said the revelation came to light when Susan Morris, Albertsons’ recently appointed CEO, testified in court.
“The misconduct included Ms. Morris’s secret communications with C&S’s CEO and others, utilizing personal emails and cell phones to advance Albertsons’s strategy. This strategy resulted in C&S criticizing the divestiture package that C&S had voluntarily agreed to, which in turn caused regulators to believe that C&S was an inadequate divestiture buyer. The Washington court cited these very communications when it ultimately blocked the merger,” Kroger said.
“As a result of its misconduct, Albertsons is not entitled to the $600 million termination fee under the terms of the parties’ merger agreement, nor is Albertsons entitled to the other damages it seeks.”
Kroger is also accusing Boise, Idaho-based Albertsons of planning early on to sue its merger partner if the deal fell apart.
The proposed $24.6 billion deal was rejected by two courts in December, and one day after the rulings, which were handed down separately on the same day, Albertsons filed a lawsuit that invoked the $600 million termination fee in its contract.
Albertsons has said it aims to convince the courts that it’s owed billions of dollars.
“Kroger was prepared, in the event of adverse court decisions, to pursue all remaining options to close the merger,” Kroger said in the press release. “But, within hours of the court decisions blocking the merger, Albertsons terminated the merger agreement and filed a 140-page complaint against Kroger.
“These actions ensured that the merger would never close, and further demonstrated that Albertsons had long before shifted its focus towards the litigation that is now pending between the parties, abandoning its contractual obligation to use best efforts to close the transaction.”
Albertsons told the AP on Tuesday that Kroger killed the deal: “Kroger’s self-interested conduct doomed the merger, and we are now focused on returning value to Albertsons’ shareholders to compensate for those losses.”
Timothy Inklebarger, link to story: HERE