U.S. grocery chain Albertsons Companies will begin presenting its case in court on Monday, seeking more than $8 billion in damages from its larger rival, Kroger, for allegedly derailing their agreed-upon $24.6 billion merger two years ago.
In December 2024, federal and state courts blocked the deal, and Albertsons immediately terminated the merger, which Ohio-based Kroger said cut off its ability to appeal.
The trial centers on Albertsons’ claim that Kroger breached its commitment to secure regulatory approval for the deal by refusing to sell enough stores. Albertsons maintains that it is therefore owed a premium of up to $6.88 billion that the deal would have delivered to its shareholders, as well as the $600 million termination fee and more than $1 billion in tax adjustments.
Kroger said it will prove at trial that Albertsons isn’t entitled to the termination fee, arguing that Albertsons undermined Kroger’s negotiating position.
The 2022 merger aimed to position the two companies and their 5,000 stores to compete more effectively with newer entrants in the grocery market, such as Walmart, Costco, Amazon, and Aldi. However, President Joe Biden challenged the proposed combination, arguing that the deal would eliminate direct competition and lead to higher prices at checkout.
Kroger said in court filings that Albertsons misread the merger agreement and that Kroger met its obligations, blaming regulatory opposition for the deal’s failure. Kroger also spent more than $1 billion trying to close the deal, which it said showed it was not willfully breaching the agreement.
Since the deal’s termination, Kroger’s stock has risen 4% while Albertsons has fallen nearly 30%.
The bench trial is scheduled to last two weeks in Delaware’s Court of Chancery.
By CEO NA Editorial Staff
