It’s been 21 months since Kroger announced its $25 billion plan to buy Albertsons, but an update in a Colorado lawsuit means the deal will be on ice for at least a couple more months.
Deal Paused For Federal, State Court Case Preparations
Colorado Attorney General Phil Weiser filed a lawsuit against Kroger and Albertsons in February, and announced this week that the companies agreed to pause their deal until the lawsuit’s outcome is determined. The State of Colorado claims that the merger would violate antitrust regulations, and hurt consumers and farmers by consolidating a few supermarkets into even fewer options.
To that point, putting Albertsons and Kroger-owned Fred Meyers under one corporate roof in Boise would shovel over half of Boise residents’ grocery budgets to one company.
If you think that sounds like it’s veering toward a monopoly, the Federal Trade Commission (FTC) and the State of Washington would agree with you, and have joined Colorado with their own lawsuits.
Kroger stipulated in a congressional hearing that it would sink $500 million into cutting grocery prices, and sell hundreds of stores to other supermarkets.
An analysis by BoiseDev found that the half-billion dollar price tag cuts might look good on paper in front of the U.S. Senate, but on receipts for you and I, the savings would round out to between one and two cents per trip to the store.
What’s Next: Three Trials and Deadline Looming
The next few months will be a gauntlet for the merger.
First up, the FTC will take Kroger to the U.S. District Court starting on Aug. 26. Kroger and Albertsons have put their largest efforts to calm antitrust fears behind this federal lawsuit, proposing the sale of hundreds of stores to C&S Wholesale Grocers, which wasn’t enough for the FTC to call off the lawsuit.
Depending on the outcome in the FTC case, the deal could be over before the state cases begin.
Washington’s trial will begin on Sept. 16. Washington interfered with the merger because it has the most stores that could be impacted out of any state, and is spending a quarter of its antitrust budget on the prosecution.
Colorado’s hearing will start on September 30. The companies set an Oct. 9 deadline for the merger, saying either entity could walk away after that date.
