Albertsons terminates merger with Kroger and sues for breach of agreement – Washington Examiner
Albertsons has officially terminated its merger agreement with Kroger and is filing a lawsuit against Kroger, claiming it breached the contract by not making adequate efforts too secure regulatory approval for the merger. The decision follows a federal court ruling that blocked the merger, leading Albertsons CEO Vivek Sankaran to express disappointment in the court outcomes.The Federal Trade Commission (FTC), along with nine state attorneys general, had previously sued to prevent the merger, celebrating the court’s decision as a significant victory for consumers, which would protect them from potential price increases on essential groceries.
Albertsons terminates merger with Kroger and sues for breach of agreement
Albertsons has terminated its planned merger with Kroger and is suing Kroger for alleged breach of the merger agreement, claiming it had failed to make its “best efforts” to get the merger approved.
The planned merger was doomed after a judge on the U.S. District Court for the District of Oregon blocked it, but on Wednesday morning, Albertsons CEO Vivek Sankaran confirmed the merger between the two supermarket giants would be terminated.
“Given the recent federal and state court decisions to block our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement. We are deeply disappointed in the courts’ decisions,” Sankaran said in a statement about the decision to terminate the merger.
The Federal Trade Commission, which, along with nine state attorneys general, sued the companies to block the merger from going forward, celebrated the court decision by calling it a “major victory for the American people.”
“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 Vons in Southern California, or a Jewel-Osco in Illinois,” FTC Bureau of Competition Director Henry Liu said in a statement.
“This is also a victory for thousands of hardworking union employees, protecting their hard-earned paychecks by ensuring Kroger and Albertsons continue to compete for workers through higher wages, better benefits, and improved working conditions,” the statement continued.
Shortly after announcing it had terminated the merger agreement, Albertsons filed a lawsuit against Kroger for allegedly failing to exercise “best efforts” and to take “any and all actions” for the merger to receive regulatory approval.
“A successful merger between Albertsons and Kroger would have delivered meaningful benefits for America’s consumers, Kroger’s and Albertsons’ associates, and communities across the country. Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators’ concerns,” it said.
“Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates and consumers. We are disappointed that the opportunity to realize the significant benefits of the merger has been lost on account of Kroger’s willfully deficient approach to securing regulatory clearance,” it added.
Kroger said in its own statement that Albertsons’s claims were “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, which we will prove in court,” the company said in a statement. “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,” the statement added.
The merger would have been the largest supermarket merger in U.S. history, but instead, the proposed $24.6 billion acquisition failed after pushback from unions, competitors, and federal regulators.
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
Now loading...