In separate cases, two judges blocked the Kroger and Albertsons merger worth $24.6 billion on Tuesday. One was initiated by federal regulators and the second by the Washington state attorney general.
Per CNN, U.S. District Court Judge Adrienne Nelson delivered the ruling in Oregon after she held a hearing for three weeks. The court found the deal would violate the antitrust law, and the ruling was thus in favor of the Federal Trade Commission.
That same day, per AP News, Judge Marshall Ferguson in Seattle, Washington permanently barred the merger, slated to have become the largest in the nation's history, as it would curtail competition and hurt customers.
Here's all we know about the Kroger Albertsons deal: The ruling, why it fell through, and more
Per AP News, Kroger, and Albertsons both expressed disappointment in the ruling and are taking a second look at their options. They claimed the courts made an error in their judgment.
They are also waiting to hear the third ruling in Colorado. Per the outlet, the companies could appeal the decision, though the deal is likely to fall through in that period.
Jeffrey Oliver, an antitrust lawyer and partner a Baker Botts, said:
"For the parties, the road gets steeper from here, just given the costs of keeping a deal together and the significant doubts about its viability given today’s opinion."
Per CBS News, here's what Eil Saunders, managing director, GlobalData had to say.
"The judge's ruling effectively ends the likelihood of a deal taking place. Of all the cases the FTC has litigated over the past few years, this one was the most sensitive as it involved two huge firms supplying essential goods."
The merger was announced in 2022, and per CNN, the fifth and tenth largest supermarket chains in the country were slated to join forces. The two companies own massive grocery chains in and of themselves, including Safeway, Vons, Harris Teeter, and Fred Meyer.
Per the outlet, grocery stores have struggled to stay alive in recent years due to competition, and Kroger and Albertsons were trying to stay ahead to keep up with Walmart and Amazon. On Tuesday, however, the Federal Trade Commission came out on top instead.
Alongside several states, it moved to stop the merger at the federal court in Oregon, and the government found that should the merger take place, it would culminate in skyrocketing food prices and fewer choices for consumers.
Per NPR, however, Kroger and Albertsons contended that the merger would have allowed them to slash food prices even further, and would have given them the option to compete against other grocery-selling outlets.
Per CNN, the two companies also play employers to a good chunk of unionized workforces and wanted to push back on non-union giants.
Per AP News, however, Judge Nelson wasn't convinced. She said during her ruling:
“Any harms defendants experience as a result of the injunction do not overcome the strong public interest in the enforcement of antitrust law, especially given the difficulty in disentangling a premature merger."
The outlet also reveals that Kroger was slated to invest $1 billion in slashing grocery pricing, an extra $1 billion in wages for grocery store workers, and $1.3 billion to revamp Albertsons stores, to no avail.
“The promise to make a price investment is not legally binding, and the court must give limited weight to a non-binding promise made during these proceedings,” Nelson stated.
Henry Liu, Director of the agency's Bureau of Competition, said in a statement, per CBS News:
"This historic win protects millions of Americans across the country from higher prices for essential groceries—from milk, to bread, to eggs — ultimately allowing consumers to keep more money in their pockets. This victory has a direct, tangible impact on the lives of millions of Americans who shop at Kroger or Albertsons-owned grocery stores for their everyday needs, whether that's a Fry's in Arizona, a Von's in Southern California or a Jewel-Osco in Illinois."
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Kroger is a Cincinnati-based brand and it boasts 2,800 stores in 35 states. Albertsons, on the other hand, is based in Boise, Idaho, and it clocks in with 2,273 stores in 34 states. Per AP News, together, the companies employ over 700,000 people.
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