Federal Court Enjoins Kroger-Albertsons Merger, Companies Withdraw Merger Proposal

On December 10, 2024, the U.S. District Court for the District of Oregon issued an opinion and order preliminarily enjoining the proposed merger between Kroger and Albertsons in a challenge brought by the Federal Trade Commission (FTC), the District of Columbia, and eight states: Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming. Federal Trade Commission v. Kroger Company, No. 3:24-cv-00347.

In a press release, the FTC stated that Kroger’s proposed acquisition of Albertsons “would be the largest supermarket merger in U.S. history.” The court “f[ound] that the merger would lead to undue market concentration in multiple geographic markets in both the supermarkets and large format stores markets that would presumptively lessen competition.” Additionally, the court “tentatively f[ound] that the proposed union grocery labor market . . . is a plausible, relevant market for antitrust purposes.” The court rejected the grocery stores’ argument that “without the scale afforded by the merger . . . they would not be able to compete against ever-growing Walmart, Amazon, or Costco,” stating, “The overarching goals of antitrust law are not met . . . by permitting an otherwise unlawful merger in order to permit firms to compete with an industry giant.”

Although the court granted the preliminary injunction, it specified that the “injunction simply pauses the merger” and “in no way forces [the defendants to abandon the merger] . . . leav[ing] open the possibility that they may pursue the merger at a later date should it be deemed lawful in the administrative proceedings” (See In the Matter of Kroger Company/Albertsons Companies, Inc., FTC No. 9428).

On December 11, 2024, Albertsons issued a press release stating that the company had filed a complaint in the Delaware Court of Chancery for breach of contract against Kroger, claiming that Kroger “fail[ed] to exercise ‘best efforts’ and to take ‘any and all actions’ to secure regulatory approval of the companies’ agreed merger transaction,” although the complaint “is temporarily under seal [pursuant to Court of Chancery rules].” Albertsons Companies, Inc. v. The Kroger Company, No. 2024-1276.

However, on December 16, 2024, Kroger and Albertsons filed a joint motion to dismiss the FTC administrative proceedings, stating that the companies had each terminated their proposed merger and, on December 27, 2024, the FTC issued an order dismissing its February 2024 complaint.

For more on antitrust issues, see the Center’s Agricultural Antitrust Litigation Issue Tracker.

Author: 
Audry Thompson, Staff Attorney