The Federal Trade Commission filed a lawsuit Monday to block the proposed Kroger – Albertson $24.6 billion merger, claiming it would be an “anticompetitive” deal that would create a monopoly.
Attorneys general from Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming joined the lawsuit. AGs in Washington and Colorado have already filed their own lawsuits.
The FTC asserts that Kroger’s acquisition of Albertsons would “eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans.”
Kroger and Albertsons both released statements following the announcement. Kroger claimed that blocking the merger would “actually harm the very people the FTC purports to serve: America’s consumers and workers.” Kroger added that it has reduced prices every year since 2003, which amounts to $5 billion invested from the company and a 5% reduction in its own gross margin.
Kroger previously reported that it would invest $500 million to cut prices if the deal goes through, and invest $1.3 billion in Albertsons store upgrades.
Albertsons’ statement said the acquisition would “expand competition, lower prices, increase associate wages, protect union jobs, and enhance customers’ shopping experience.” The company added that blocking the merger is a win for retail behemoths like Amazon and Walmart.
The FTC lawsuit also takes issue with Kroger’s proposal to divest more than 400 stores to C&S Wholesale Grocers, arguing that C&S would face significant obstacles “stitching together the various parts and pieces from Kroger and Albertsons into a functioning business – let alone a successful competitor against a combined Kroger and Albertsons.”
