By Steve Watkins – Staff reporter, Cincinnati Business Courier Jul 25, 2024 Updated Jul 25, 2024 2:05pm PDT
A Colorado judge has granted a temporary halt to Kroger Co.’s planned $24.6 billion acquisition of rival Albertsons Cos. Inc.
Denver District Court Judge Andrew Luxen granted preliminary injunction on July 25 to delay the acquisition that would merge Albertsons into Kroger while canceling a hearing that had been set for Aug. 12. Instead, the court scheduled a trial to Sept. 30. That trial is expected to last two weeks.
Both companies agreed to the delay.
A hearing on a case filed by the Federal Trade Commission in February in federal court in Portland remains scheduled to take place Aug. 26. In that case, U.S. District Court Judge Adrienne Nelson could issue an injunction blocking the deal or, effectively, let the deal go through.
Kroger (NYSE: KR), the nation’s largest operator of traditional supermarkets, agreed in October 2022 to acquire Boise, Idaho-based Albertsons, the nation’s second-largest operator of traditional supermarkets. Federal regulators and several state attorneys general have opposed the deal on antitrust grounds, arguing it would hurt competition and negatively affect customers, employees and suppliers.
Colorado’s attorney general is among those opposing the deal and filed the lawsuit in Denver in February. Another similar case is pending in Washington state.
Earlier this month, Kroger released a list of 62 Oregon Safeway locations, including 29 in the Portland region, that Kroger would divest if the deal goes through. Albertsons owns Safeway.
Kroger officials see the delay as "welcome news” because it removes the preliminary injunction hearing on Aug. 12, a Kroger spokesperson said in an emailed statement. Instead, the case can proceed to a hearing on the state’s request for a permanent injunction starting Sept. 30.
“We look forward to defending in court how the combination of Kroger and Albertsons will provide meaningful, measurable benefits, including lower prices and more choices
for families across the country and more opportunities for stable, well-paying union jobs,” the Kroger spokesperson said.
Colorado Attorney General Phil Weiser is pleased both companies agreed to “halt their plans to merge until the court rules on the state’s lawsuit,” he said in a statement he issued Thursday.
“This is great news for shoppers, workers, farmers, and other suppliers, who can rest assured that this megamerger will not go into effect during harvest season and while kids are headed back to school,” Weiser said. “My office looks forward to making the case that this merger will eliminate competition and impact food prices, jobs, and consumer choice.”
The companies have agreed to sell 579 overlapping stores in 18 states and the District of Columbia to Keene, N.H.-based C&S Wholesale Grocers in an effort to preserve competition in those markets. None of those stores to be sold is located in Greater Cincinnati, where Kroger has a dominant market share and Albertsons has no brick and mortars.
Kroger and Albertsons have argued the deal will help the companies’ stores remain strong in an increasingly competitive landscape that includes Walmart, Amazon, online services and dollar stores. Kroger also has committed to investing $500 million starting on day one of the deal’s consummation to reduce prices and $1 billion in employee wages and benefits. It also has committed to not laying off employees or closing stores, as has C&S for the stores it’s acquiring.