Kroger sues Albertsons after judge rules against grocery merger.

• Albertsons on Wednesday formally terminated its proposed $25 billion merger with Kroger.
• Kroger was sued by Albertsons for breaching contract and failing to fulfill commitments that helped secure the deal's approval.
• It comes a day after a judge blocked the planned tie-up.

On Wednesday, it was announced that the proposed $25 billion merger between Kroger and had been formally terminated, and a lawsuit was filed against Kroger for breach of contract and failure to fulfill its commitments to aid in the approval of the deal.

It comes a day after a judge blocked the planned tie-up.

Albertsons accused Kroger of violating their merger agreement by persistently refusing to divest required assets for antitrust approval, disregarding regulators' feedback, rejecting stronger divestiture buyers, and failing to collaborate with Albertsons.

"Kroger's self-serving conduct has harmed Albertsons' shareholders, associates, and consumers, according to Tom Moriarty, General Counsel and Chief Policy Officer of Albertsons. He stated that Kroger's willfully deficient approach to securing regulatory clearance has resulted in the loss of the opportunity to realize the significant benefits of the merger."

The allegations in the lawsuit were deemed "baseless and without merit" by Kroger.

The company's statement stated that the actions taken were an attempt to evade responsibility after Kroger's written notification of Albertsons' violations of the agreement and to request payment of the merger's break fee, which they were not entitled to.

The lawsuit between the two grocery rivals represents a corporate divorce battle over the payment of legal fees and breakup fees associated with their planned merger.

Albertsons stated in its news release that it is entitled to a $600 million termination fee and compensation for the time and resources it invested in obtaining approval for the merger, as well as the prolonged uncertainty it experienced due to Kroger's actions.

In contrast, Kroger rejected Albertsons' payments and stated that it is eager to address the unfounded allegations in court.

On Wednesday, in early trading, Albertsons and Kroger experienced share price increases of approximately 1% and 2%, respectively.

This is breaking news. Please check back for updates.