Fox Business’s Lydia Hu reveals the latest on the Kroger-Albertson merger as it faces multiple legal challenges.
A federal judge on Tuesday blocked a proposed $25 billion merger Albertsons and KrogerThe Federal Trade Commission (FTC) agreed that the deal would weaken competition in the grocery industry.
U.S. District Judge Adrienne Nelson said the two companies’ plan to lower grocery prices and sell more than 500 stores failed to address concerns about R.induced competition in the area and what impact it may have on consumers and workers.
Nelson’s decision agreed with the FTC’s argument that the merger would eliminate direct competition between the two grocers, making it illegal.
Albertsons and Kroger argued in legal filings and during a three-week trial in Portland, Oregon, that their plan to sell more than 500 stores to C&S Wholesale Grocers would ensure that the stores remain open and accessible to consumers, who combined Will provide a balance to the grocery store. huge. Kroger also promised to invest $1 billion to lower grocery prices after its acquisition of Albertsons closes.
Kroger-Albertson merger headed to trial
A federal judge blocks Kroger and Albertsons’ proposed $25 billion settlement. (Kroger: Charles Bertram/Lexington Herald-Leader/Tribune News Service via Getty Images | Albertsons: Shelby Tauber/Bloomberg via Getty Images/Getty Images)
The deal would have been the largest merger in the history of the grocery industry. Kroger argued in legal filings that the court’s rejection of the plan would effectively end the deal.
The judge said that despite the ruling, the companies could consider addressing antitrust issues and securing approval to move forward with the reconfigured merger.
| anchor | Security | Last | Change | Change % |
|---|---|---|---|---|
| ACI | Albertsons Companies | 19.54 | +0.16 |
+0.83% |
| K.R | kroger company | 60.58 | +0.47 |
+0.79% |
“Although defendants may choose to abandon the merger due to preliminary injunction“This order in no way compels them to do so, and leaves open the possibility that they could pursue the merger at a later date should it be deemed lawful in administrative proceedings,” Nelson wrote. ”
He said, “An injunction simply stops the merger. Any harm that defendants may suffer as a result of an injunction does not outweigh the strong public interest in enforcement of antitrust law, especially given the difficulty in resolving mergers ahead of time.” “Happened.”
Federal Trade Commission Chairwoman Lina Khan has led antitrust investigations into several mergers during the Biden administration. (Photo by Drew Angerer/Getty Images/Getty Images)
FTC spokesman Douglas Farrar said the ruling “protects competition in the grocery market, which will prevent prices from rising further.”
“This statement victory makes clear that it is based on strong, reality antitrust enforcement Delivers real results for consumers, workers and small businesses,” Farrar said.
John Donenberg, deputy director of the National Economic Council, said in a statement, “The Kroger-Albertson merger would have been the largest supermarket merger in history – raising grocery prices for consumers and driving down wages for workers. Our administration continues to oppose large corporate mergers. Proud to stand up to something that raises prices, undercuts workers and hurts small businesses.”
Kroger-Albertson merger: Is it good or bad for shoppers?
Albertsons told Fox Business in a statement: “We are disappointed by the U.S. District Court’s decision to grant the FTC’s request for a preliminary injunction.”
“We believe we clearly explained during the proceedings how the proposed merger would increase competition, lower prices, increase associate wages, protect union jobs and enhance the customer shopping experience. “We are carefully reviewing the Court’s opinion and evaluating our options in the merger agreement accordingly,” Albertson added.
“We are disappointed by the U.S. District Court’s decision to grant the FTC’s request for a preliminary injunction,” a Kroger spokesperson told Fox Business. “We believe we clearly explained during the proceedings how the proposed merger would increase competition, lower prices, increase associate wages, protect union jobs and enhance the customer shopping experience. We are carefully reviewing the Court’s opinion and evaluating our options accordingly.
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Kroger’s stock rose 5.1% during Tuesday’s trading session, most of which occurred after the judge’s decision was handed down.
Albertsons stock was down more than 2.2% on the day and fell further in after-hours trading, down more than 0.8% by Tuesday evening.
Reuters contributed to this report.
