The Kroger-Albertsons acquisition is a planned acquisition between the two American grocery chains which serve most of the country. Kroger plans to compete with non-union grocery chain Amazon Fresh, which includes Whole Foods Market, discount department store chains Target and Walmart and warehouse club retail chains Costco and Sam's Club.
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| Initiator | Kroger |
|---|---|
| Target | Albertsons |
| Type | Full acquisition |
| Cost | $24.6 billion |
| Initiated | October 14, 2022 |
Announced in October 2022, Kroger, one of the largest supermarket chains in the United States, agreed to purchase Albertsons for $24.6 billion.[1] This merger, if approved, would create one of the largest grocery store chains in the US, combining nearly 5,000 stores and employing approximately 700,000 people.[2]
Background
editIn October 2022, Kroger agreed to buy Albertsons for $34.10 per share, valuing the deal at $24.6 billion1. The acquisition aims to enhance Kroger’s competitive edge by expanding its market presence and leveraging economies of scale to offer better prices and services to customers. However, the merger has faced significant scrutiny from regulators and opposition from various stakeholders.[3]
On November 29, 2022, the chief executives of the two companies went before the antitrust panel of the Senate Judiciary Committee to defend the merger.[4] In May 2023, the UFCW International announced their opposition to the deal.[5]
As of mid-2024, the acquisition is still under review by federal and state regulators. Ongoing negotiations and legal challenges have delayed the completion of the deal, with a final decision expected by mid-August 2024. In January 2024, Bob Ferguson, the Washington Attorney General filed a lawsuit to stop the merger. [6] In February 2024, Phil Weiser the Colorado Attorney General filed a lawsuit in an attempt to stop the merger due to his belief that it would greatly reduce competition and harm Coloradans.[7]
Regulatory Challenges
editThe Federal Trade Commission (FTC) and several state attorneys general have raised concerns about the potential anticompetitive effects of the merger3. The FTC filed a lawsuit in February 2024 to block the acquisition, arguing that it would reduce competition, lead to higher grocery prices, and negatively impact workers’ wages and benefits. Additionally, the state attorney general for Washington filed a separate lawsuit, citing internal communications from Albertsons’ executives that questioned the legality and consumer benefits of the deal.[8]
Divestiture Plans
editTo address regulatory concerns, Kroger and Albertsons have proposed divesting 579 stores across various locations45. This divestiture is intended to maintain competitive balance in the grocery market and alleviate fears of a monopoly.[9]
Albertsons Brands
editReferences
edit- ^ Repko, Melissa (2022-10-14). "Kroger agrees to buy rival grocery company Albertsons for $24.6 billion". CNBC. Retrieved 2024-07-15.
- ^ Coolidge, Alexander. "Kroger wants to merge with rival Albertsons: What we know about the proposed $25B takeover". USA TODAY. Retrieved 2024-07-15.
- ^ Kang, Jaewon. "Kroger to Buy Albertsons in $24.6 Billion Deal That Would Create New Grocery Giant". WSJ.
- ^ "Albertsons, Kroger CEOs defend $25 bln merger to U.S. Senate committee | Reuters". Reuters.
- ^ Kang, Jaewon. "Biggest Grocery Union Opposes $20 Billion Kroger-Albertsons Deal". WSJ.
- ^ Selyukh, Alina (January 15, 2024). "Warning of higher grocery prices, Washington AG sues to stop Kroger-Albertsons merger". NPR.
- ^ "Colorado attorney general sues to block Kroger-Albertsons merger". February 14, 2024.
- ^ Meyersohn, Nathaniel (2024-02-26). "FTC sues to block Kroger and Albertsons' $25 billion mega-merger | CNN Business". CNN. Retrieved 2024-07-15.
- ^ "Kroger, Albertsons Unveil Stores to Be Divested in Merger". Bloomberg.com. 2024-07-09. Retrieved 2024-07-15.
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