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Kroger’s $25 Billion Takeover of Albertsons Faces Mounting Legal Threats

 |  February 5, 2024

Kroger’s ambitious plan to acquire rival Albertsons for $25 billion is encountering heightened legal challenges from multiple fronts, adding to the already intense federal antitrust scrutiny surrounding the deal. Several states and concerned consumers have taken legal action in an attempt to halt what has been touted as one of the largest-ever proposed retail mergers.

The latest legal hurdle emerged in Washington, where a lawsuit was filed in state court on January 15. This move follows more than a year of anticipation for a decision by the Federal Trade Commission (FTC) on whether to contest the merger. While some might dismiss this state-level lawsuit as a distraction or a mere nuisance compared to a potential clash with federal regulators, legal experts are warning against underestimating its significance.

According to Eleanor Fox, a trade regulation professor at New York University, these state and consumer lawsuits pose a serious threat to the deal. “These are serious lawsuits – they are a big threat,” she emphasized in an interview with The Enquirer. Under U.S. antitrust law, challenges can come not only from federal authorities but also from individual states and consumers.

Read more: US Unions Talk Out Against The Albertsons-Kroger Merger

The Kroger-Albertsons merger, impacting a combined network of nearly 5,000 stores spanning almost every US state, has been divisive since its inception. With implications for the employment of over 700,000 workers, surpassing the workforce of the US Postal Service, the deal has attracted attention for its potential impact on competition within the retail sector.

Legal experts warn that the mounting legal challenges, including the recent state-level lawsuit in Washington, could jeopardize the entire $25 billion deal. The uncertainty surrounding the outcome of these legal proceedings adds another layer of complexity to an already contentious merger process.

While federal antitrust scrutiny continues to loom over the Kroger-Albertsons deal, the emergence of state-level legal challenges underscores the multi-pronged approach being taken to scrutinize the potential implications of this high-stakes merger. As the legal battles unfold, the fate of the proposed acquisition remains uncertain, leaving stakeholders and industry observers closely watching for further developments.

Source: Cincinnati