A federal judge on Tuesday blocked Kroger's $24.6 billion acquisition of Albertsons, ruling that the proposed union would reduce competition for grocers.
A preliminary injunction issued by an Oregon court found in favor of the Federal Trade Commission, which had argued that the deal would violate antitrust law.
According to Neil Saunders, managing director of GlobalData, the judge's decision “effectively ends the chances of a deal happening”. “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,” the retail analyst said.
FTC in February filed a lawsuit to stop Eight state attorneys general and the District of Columbia joined the agency's lawsuit over the proposed merger.
An FTC spokesperson said, “Today's victory protects competition in the grocery market, which will prevent prices from rising even further. This victory makes it clear that strong, reality-based antitrust enforcement is important for the protections for consumers, workers, and small businesses.” Provides real results.” ,
Kroger and Albertsons did not immediately respond to requests for comment. The companies agreed to join in October 2022, arguing that their union was needed to better compete with Amazon, Costco, Walmart and other large rivals.
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.
Kroger has promised to invest $500 million to lower prices once the deal closes. It said it had also invested in price cuts when it merged with Harris Teeter in 2014 and Roundy's in 2016. Kroger also promised to invest $1.3 billion in store improvements at Albertsons as part of the deal.
The FTC, which said the proposed deal would be the largest grocery merger in U.S. history, said it would also eliminate competition for workers, threatening their ability to win higher wages, better benefits and better working conditions.