Court blocks Kroger’s $25 billion takeover of grocery rival Albertsons

A US judge has blocked the upcoming $25 billion merger of American grocery chains Kroger And Albertsons On Tuesday, he sided with the US Federal Trade Commission, securing a victory for the Biden administration.

The FTC argued at a three-week trial in Portland, Oregon, that the merger would eliminate direct competition between the two largest traditional grocery chains, leading to higher prices for shoppers and less bargaining power for unionized workers.

Kroger pushed back against those claims, saying the deal would lower prices, particularly at Albertsons stores, where prices were reportedly 10-12% higher than at Kroger stores. The combined company would fund price cuts through cost savings it expects from larger operations and a larger customer base to boost revenue for Kroger’s data consulting business, Kroger said.

Nelson’s ruling essentially fails the merger, Kroger said in court documents.

Had the deal gone through, Kroger would own about 5,000 stores across the United States. The companies argued in court that they needed to merge in order to compete with global corporations such as B. to be able to compete Walmart And Amazon.com.

Kroger and Albertsons had also tried to convince U.S. District Judge Adrienne Nelson that selling 579 stores, particularly in western U.S. states where Kroger and Albertsons are close to each other, would protect competition.

Grocery worker unions criticized the merger, saying it would likely lead to job losses, and attorneys general from ten states and the District of Columbia either joined the FTC’s case or filed suit to block the merger on their own.