Albertsons canceled its $24.6 billion merger with Kroger on Wednesday, a day after a judge's ruling temporarily blocked union, and sued a rival grocery chain for breach of contract.
“Given the recent federal and state court decisions blocking our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement,” Albertsons CEO Vivek Sankaran said in a statement. statement. “We are deeply disappointed by the courts' decisions.”
Kroger, based in Cincinnati, Ohio, operates 2,750 stores in 35 states and the District of Columbia, including the Harris Teeter, Mariano's, Ralphs and Smith's chains. Albertsons, based in Boise, Idaho, operates about 2,300 stores in 34 states, including brands such as Jewel Osco, Safeway and Shaw's. Overall the companies employ approximately 700,000 people.
In a separate statement released Wednesday, Albertsons Said It is suing Kroger for willful breach of contract and breach of the covenant of good faith and fair dealing.
Albertsons' decision to cancel the merger ended a two-year quest to make what could have been Merger of biggest grocery stores In American history, both businesses argued that combining would help them better compete with large retailers such as Walmart, Costco, and Amazon.
But on Tuesday, an Oregon court ruled that the proposed union would harm grocery industry competition, ruling in favor of the Federal Trade Commission, which had argued the deal would violate antitrust law.
“The Kroger-Albertsons deal always faced an uphill battle for approval,” Neil Saunders, managing director of GlobalData, said in a report. “Of all the cases the FTC has prosecuted over the past few years, this was the most sensitive because it involved two large companies supplying essential goods.”
Albertsons accused of breach of contract
Albertsons alleges that Kroger failed to exercise “best efforts” and take “any and all actions” to secure regulatory approval of the companies' agreed merger transaction, as required by Kroger under the terms of the merger agreement between the parties. It was necessary.” According to the statement.
In an email to CBS News, Kroger called Albertsons' claims “baseless and without merit.”
A spokesperson told CBS News, “Kroger denies these allegations in the strongest terms possible, particularly in light of Albertsons's repeated willful violations and interference during the merger process.”
Kroger, based in Cincinnati, Ohio, operates 2,750 stores in 35 states and the District of Columbia, including brands such as Ralphs, Smith's and Harris Teeter. Albertsons, based in Boise, Idaho, operates about 2,300 stores in 34 states, including brands such as Safeway, Jewel Osco and Shaw's. Overall the companies employ approximately 700,000 people.
Under the merger agreement, Kroger and Albertsons — which compete in 22 states — agreed sell 579 stores at places where their locations overlap C&S Wholesale GrocersNew Hampshire-based supplier to independent supermarkets, which also owns the Grand Union and Piggly Wiggly store brands.
But the FTC filed a lawsuit earlier this year to block the merger, saying it would eliminate competition, raise prices and lower workers' wages. It also said that the disinvestment plan was inadequate and that C&S was not adequately equipped to handle so many stores.
Contributed to this report.