Albertsons demands Kroger pay over $9 billion amid failed merger

Investing.com -- Albertsons Cos. is seeking more than $9 billion from Kroger Co. following the collapse of their proposed merger, which would have created the largest U.S. grocery chain.

Lawyers for Albertsons presented the demand today in Delaware Chancery Court. A two-week trial is scheduled for later this month to determine responsibility for the failed $24.6 billion deal. A federal court blocked the merger in December 2024.

Albertsons is asking Judge Lori Will to rule that Kroger willfully breached the merger agreement by failing to use best efforts to obtain regulatory approval. The company claims Kroger refused to modify its asset divestiture plan. The requested payment of more than $9.3 billion includes the premium stockholders would have received if the deal had completed, a $600 million termination fee, $75 million in interest, and additional costs.

The merger agreement required Kroger to remove any antitrust impediment to the merger, with the only limit being that Kroger did not have to divest more than 650 stores, according to Albertsons' court filing.

"The bottom line is that Kroger made a promise and broke it," Albertsons said in a statement. "Kroger should be held accountable for the harm it caused our shareholders, associates, and customers – and we look forward to proving our case in court."

The proposed merger would have combined Kroger, the largest U.S. grocery chain, with Albertsons, the second-largest grocer. The companies stated the merger would increase competition against Amazon.com Inc., Walmart Inc., and other non-unionized competitors.

To obtain regulatory approval, the companies agreed to sell hundreds of stores to C&S Wholesale Grocers Inc. A federal judge blocked the deal in December 2024 after ruling in favor of the U.S. Federal Trade Commission, which argued the divestiture plan did not adequately address antitrust concerns.

Albertsons terminated the deal and filed suit against Kroger, claiming the company willfully violated the merger agreement by refusing to sell the required assets. Albertsons stated Kroger prioritized profit targets over securing regulatory approval.

Kroger has stated it made all possible efforts to secure approval and accused Albertsons of undermining its divestiture proposal to regulators. Kroger claimed Albertsons secretly worked with C&S to pressure regulators into requiring Kroger to divest more stores than necessary. C&S has said all its communications with Kroger, Albertsons, and regulators met contractual, legal, and ethical obligations and were aimed at obtaining regulatory approval.

Original Article

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