The Kroger-Albertsons merger may face additional scrutiny, delaying its closure.
- The proposed merger was previously set to be completed by early 2024.
- The deal has faced intense opposition from U.S. lawmakers and political leaders.
- Consolidation opponents fear that it may result in increased prices and reduced consumer shopping options.
The acquisition of a rival supermarket chain by a competitor is now anticipated to occur in the first half of Kroger's fiscal year 2024, rather than early this year, due to ongoing discussions with federal regulators, as stated by the companies in a Monday announcement.
The joint statement revealed that Kroger, Albertsons, and C&S Wholesale Grocers are in "active and ongoing dialogue" with the Federal Trade Commission and individual state attorneys general. Despite the longer duration than initially anticipated, the merger agreement and divestiture plan accounted for such potential timing.
In order to finalize the $24.6 billion deal, Kroger agreed to sell 413 stores and eight distribution centers to C&S for $1.9 billion in September. If the merger is approved, C&S may need to acquire an additional 237 stores from Kroger and Albertsons, according to a statement made by Kroger last year.
Kroger announced plans to invest $1.8 billion to lower prices, improve customer experience, and increase wages and benefits for associates.
Nearly 2,800 stores make Kroger the nation's largest grocer, and Albertsons, with its brands Safeway and Acme, follows as the second-biggest.
The proposed merger, originally scheduled to be completed by early 2024 after the Federal Trade Commission completes its antitrust review, has faced opposition from U.S. lawmakers and political leaders due to antitrust concerns.
Opponents of the merger fear that consolidation may result in higher prices for consumers, reduced shopping options, and job losses due to decreased marketplace competition.
The attorney general of Washington state filed a lawsuit on Monday to prevent the merger of Kroger and Albertsons, claiming it would be detrimental to consumers and employees. In response, Kroger and Albertsons stated in a Monday press release that they were disappointed with the attorney general's decision to file the lawsuit before the merger had been fully reviewed by regulators.
The merger of Kroger and Albertsons would only benefit larger, non-unionized retailers such as Walmart, Costco, and Amazon, by allowing them to maintain and increase their dominant position in the grocery industry.
In December, six lawmakers, including Sens. Elizabeth Warren and Bernie Sanders and Rep. Alexandria Ocasio-Cortez, wrote a letter to the FTC arguing that Kroger's proposal to divest hundreds of stores to C&S does not address potential harms to consumers, workers, and the grocery industry.
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