The proposed merger between Kroger Co. and Albertsons Cos. is on hold until an antitrust lawsuit from Colorado Attorney General Phil Weiser to permanently block the deal is resolved.
Denver District Judge Andrew J. Luxen issued a preliminary injunction Thursday morning — which all sides agreed to — that prevents the $24.6 billion merger from closing until five days after Weiser’s lawsuit is addressed. A two-week trial on the merits of Colorado’s case is set to start on Sept. 30.
“I am pleased that Kroger and Albertsons agreed to halt their plans to merge until the court rules on the state’s lawsuit to permanently block the grocery merger. This is great news for shoppers, workers, farmers, and other suppliers, who can rest assured that this mega-merger will not go into effect during harvest season and while kids are headed back to school,” Weiser said in a statement issued after the ruling.
Weiser sued to block the merger between the parent companies of King Soopers, City Market and Safeway, the dominant grocery store brands in Colorado, on Valentine’s Day.
In June, Luxen rejected a motion by the Kroger and Albertsons companies to dismiss Colorado’s lawsuit. Luxen wrote in his order issuing the preliminary junction that based on the evidence presented by the state, “the Court finds there is a reasonable probability that the State will prove its claims against Defendants at trial.”
The two grocers also face a challenge from other states. In Oregon, a trial is set for Aug. 26. In late February, the Federal Trade Commission sued to block the merger and an administrative review is set to start July 31. The federal agency has said the merger would eliminate competition and drive up prices for millions of Americans.
Kroger and Albertsons have said the merger, announced in October 2022, would allow them to compete against national, nonunion discount grocers such as Walmart and Costco, as well as a host of smaller competitors like Whole Foods, Sprouts, and Trader Joe’s. Kroger has said the merger would generate $1 billion in higher wages, expanded benefits, long-term job security and a strong unionized workforce.
To ease concerns about reduced competition and higher prices for consumers, the companies earlier this month agreed to divest 579 stores and six distribution centers to C&S Wholesale Grocers, based in New Hampshire.
That total includes 91 Colorado stores — two Albertsons and the bulk of the remaining Safeways in the state– as well as a dairy plant, a distribution center and part of another distribution center located in the state.
Labor unions and consumer groups are also opposed to the merger.
“Our members and customers alike are concerned about potential job losses, food and pharmacy deserts, increased food prices, cost to food suppliers, and a lack of competition if the merger goes through. It’s not a done deal, and we will continue to do all we can to stop the merger,” Kim Cordova, president of UFCW Local 7, said in a statement.
Kroger is the biggest U.S. supermarket operator with about 2,700 locations. It owns Ralphs, Harris Teeter, Fred Meyer and King Soopers. Albertsons is the nation’s second-largest chain with roughly 2,200 stores.
Updated July 25, 2024, at 4.24 to add comment from the judge.
Originally Published: July 25, 2024 at 11:05 a.m.
