Traders display trading information for Kroger and Albertsons Companies on a screen on the floor of the New York Stock Exchange on October 14, 2022.
Brendan McDiarmid | Reuters
albertsons On Wednesday, it formally called off its proposed $25 billion merger. kroger The company then filed a lawsuit against the supermarket’s competitors, alleging that Kroger breached its contract and failed to deliver on its promises to approve the deal.
This comes a day after a judge blocked the planned partnership.
Albertsons said in a news release that Kroger “repeatedly refused to sell assets required for antitrust approval, ignored regulatory feedback, rejected stronger divestiture buyers, and failed to cooperate with Albertsons.” As a result, the merger agreement was breached.
Tom Moriarty, general counsel and chief policy officer for Albertsons, said in a statement: “Kroger’s self-serving actions at the expense of the deal agreed to with Albertsons are a serious threat to Albertsons’ shareholders, employees and , causing harm to consumers.” “We are disappointed that Kroger’s intentionally flawed approach to securing regulatory approval has resulted in a missed opportunity to realize the significant benefits of the merger.”
Kroger said in a statement that the allegations in the lawsuit are “unfounded and without merit.”
“This is clearly an attempt by Kroger to avoid liability and require Albertsons to pay merger penalties to which it is not entitled, following Kroger’s written notice of multiple breaches of contract by Albertsons,” the company said in a statement. There is,” he said.
About two years ago, Kroger announced plans to buy Albertsons and join forces to compete. walmart, Amazon and costco. The partnership will bring about 40 supermarket chains under one company, including Kroger’s Fred Meyer and Albertsons’ Safeway.
Wednesday’s case is akin to a corporate divorce case.
The two companies are at odds over who should pay the legal costs associated with the merger and who should be responsible for paying the split fees, if any.
In a news release, Albertsons said it would pay $600 million in termination fees and “the multiple years and hundreds of millions of dollars that Albertsons spent obtaining approval for the merger, which Albertsons did not endure for an unnecessarily long period of time.” The company is obligated to pay both “relief payments that reflect the circumstances in which it occurred.” This is the result of Kroger’s actions. ”
Meanwhile, Kroger in a statement objected to the payment to Albertsons and said it “looks forward to responding to these baseless claims in court.”
Shares of Albertsons and Kroger rose about 0.5% and 1%, respectively, in early trading Wednesday.
