Supermarket chain Albertsons announced Wednesday, Dec. 11, that it filed a lawsuit against Kroger. The suit comes after a district judge in Oregon blocked a $25 billion merger between the two companies.
Albertsons claims Kroger didn’t do what was necessary to get regulatory approval for the deal.
“Albertsons is seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole,” the company said in a statement. “In addition to the $600 million termination fee, Albertsons is entitled to relief reflecting the multiple years and hundreds of millions of dollars it devoted to obtaining approval for the merger, along with the extended period of unnecessary limbo Albertsons endured as a result of Kroger’s actions.”
In October 2022, the two grocery giants agreed to what would have become the largest U.S. merger in supermarket history. If the deal had gone through, Kroger and Albertsons would have accounted for roughly 5,000 stores.
At the time, they said it would help them compete with Amazon and Walmart. Both companies have made big plays in the grocery store space.
But District Judge Adrienne Nelson said Tuesday, Dec. 10, the deal would harm customers. Nelson discounted the Amazon competition aspect, pointing out grocery stores have a specific role in the consumer landscape. She also said the merger’s impact on competition must not be underestimated.
“Kroger willfully breached the Merger Agreement in several key ways, including by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons,” Albertsons said in the statement.
Kroger has yet to respond to the lawsuit publicly.
In terminating the deal, Albertsons CEO Vivek Sankaran says the company is ready for the next chapter.
“Over the last two years, we have invested in our core business and in new sources of revenue, while enhancing our capabilities through the rollout of new technologies,” he said in a statement.
As news of the lawsuit came out, both companies’ stocks opened trading up on Wednesday, Dec. 11.