Albertsons sues Kroger: Billion-Dollar Claim

The true reason for the wave of lawsuits between Albertsons and Kroger comes to light as the dispute between the two supermarket giants escalates. Albertsons has recently taken legal action against Kroger, alleging that the latter has shown insufficient efforts to obtain regulatory approvals for the planned $24.6 billion deal. The demand: billions of dollars in compensation to reimburse Albertsons and its shareholders for the incurred damage. In addition to a termination fee of $600 million, Albertsons demands compensation for the considerable resources invested in the project over several years. The trading day in New York was favorable for investors in both companies: Albertsons' shares rose by 1 percent, while Kroger increased by 1.8 percent. Kroger, on the other hand, stated that Albertsons' accusations were baseless. Albertsons is accused of deflecting responsibility after Kroger pointed out various contractual violations. The company is already evaluating its next steps. The merger plan of the two companies was announced in October 2022, with the aim of becoming more competitive against Amazon and Walmart, which are not unionized. If the merger succeeds, a supermarket giant with over 4,000 stores nationwide would emerge. However, the proposal continues to face obstacles, as the Federal Trade Commission filed a lawsuit in February, claiming the proposal violated antitrust laws. The plan to sell hundreds of stores to C&S Wholesale Grocers was deemed insufficient as a remedy by the FTC. A federal judge again sided with the FTC and stopped the acquisition. In response, Albertsons blamed Kroger for the failure and terminated the contract. CEO Vivek Sankaran expressed disappointment but remains optimistic about the future. Albertsons will now focus on further developing its core business and expanding its online presence.