Albertsons gives up on Kroger merger, files lawsuit against grocery chain

Albertsons announced Wednesday that it has given up its merger with Kroger and has filed a lawsuit against the grocery chain. 

This comes a day after the proposed merger between the supermarket giants floundered after judges overseeing two separate cases both halted the deal.

Albertsons filed a lawsuit against Kroger, alleging willful breach of contract in their merger agreement. The complaint, temporarily under seal, accuses Kroger of failing to meet regulatory obligations, including refusing necessary divestitures and disregarding feedback from regulators.

"Kroger willfully breached the Merger Agreement in several key ways, including by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons," Albertsons said in a press release. 

Shortly after the announcement, Kroger released this statement: 

"Albertsons’ claims are baseless and without merit.

Kroger refutes these allegations in the strongest possible terms, especially in light of Albertsons’ repeated intentional material breaches and interference throughout the merger process.
This is clearly an attempt to deflect responsibility following Kroger’s written notification of Albertsons’ multiple breaches of the agreement, and to seek payment of the merger’s break fee, to which they are not entitled.

Kroger looks forward to responding to these baseless claims in court. We went to extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process and the facts will make that abundantly clear.

We are incredibly proud of the Kroger team for how they worked through the merger process with the highest degree of integrity and commitment.

We are confident in Kroger’s value creation model to drive sustainable growth. Kroger’s Board of Directors is currently evaluating next steps that serve the best interests of Kroger’s customers and associates, and create value for shareholders."

In 2022, Kroger and Albertsons proposed what would be the largest grocery store merger in U.S. history. The companies said a merger would help them better compete with big retailers like Walmart, Costco and Amazon.

On Tuesday, U.S. District Court Judge Adrienne Nelson issued a preliminary injunction blocking the merger  after holding a three-week hearing in Portland, Oregon. Later Tuesday, Judge Marshall Ferguson in Seattle issued a permanent injunction barring the merger in Washington after concluding it would lessen competition in the state and violate Washington's consumer-protection laws.

Kroger and Albertsons said Tuesday they were disappointed in the decision.

The Associated Press contributed to this report. 

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