Traders work during a display of trading data for Kroger Co. and Albertsons Companies Inc. on the floor of the New York Stock Exchange on Oct. 14, 2022.
Brendan McDermid Reuters
Albertsons Wednesday officially finalized its proposed $25 billion merger Kroger And filed a lawsuit against its supermarket competitor, saying Kroger breached its contract and didn’t follow through on promises to help get the deal approved.
It comes a day after a judge blocked the planned tie-up.
In a news release, Albertsons said Kroger breached its merger agreement by “repeatedly rejecting the assets required for antitrust approval, ignoring regulators’ responses, rejecting strong divestiture buyers and failing to cooperate with Albertsons.”
“Kroger’s self-serving behavior, at the expense of Albertsons and agreed transactions, harmed Albertsons shareholders, associates and consumers,” said Tom Moriarty, Albertsons’ general counsel and chief policy officer, in a statement. “We are disappointed that the opportunity to realize the significant benefits of the merger was lost due to Kroger’s intentionally deficient approach to securing regulatory clearance.”
In a statement, Kroger called the lawsuit’s allegations “baseless and without merit.”
“This is clearly an attempt by Albertsons to shirk responsibility after Kroger’s written notice of multiple breaches of the agreement, and to pay a merger break fee, to which it is not entitled,” the company statement said.
About two years ago, Kroger announced plans to join forces to buy and counter Albertsons walmart, the amazon And costco. The deal would bring about 40 supermarket chains under a single company, including Kroger’s Fred Meyer and Albertsons’ Safeway.
Wednesday’s lawsuit amounts to something of a corporate divorce battle.
Companies differ over who should pay the legal fees associated with the merger and who, if anyone, is responsible for paying the breakup fee.
Albertsons said in its news release that it owes both a $600 million termination fee and “satisfaction that reflects the multiple years and millions of dollars it devoted to getting the merger approved, along with an extended period of unnecessary uncertainty resulting from Albertsons Kroger’s actions.”
Kroger, on the other hand, pushed back against paying Albertsons in a statement and said it “looks forward to responding to these baseless claims in court.”
Shares of Albertsons and Kroger rose about 0.5% and 1%, respectively, in early trading Wednesday.
