Colorado Attorney Journal Phil Weiser yesterday filed a lawsuit designed to block Kroger’s proposed $24.6 billion acquisition of Albertsons, saying the the deal would be anticompetitive.
Axios reports that “Weiser has been leading a multi-state investigation since December 2022 and is the second state to sue following Washington … The announcement said the deal not only reduces head-to-head competition, but its divestiture proposal is inadequate, because it would not ‘alleviate the anticompetitive effects of the merger.’
Some context from the Axios story:
“Weiser noted it was filed in a Denver District Court under Colorado’s antitrust statute. He argued that the deal would give Kroger considerable power with a 50% market share.
“Meanwhile, Colorado is also challenging no-poach and non-solicitation agreements between Kroger and Albertsons and is seeking civil penalties and injunctive relief as a result, Weiser says.
“The no-poach agreement restricted the two companies from hiring each other’s employees, he alleges.
“The non-solicitation agreement prevented the two grocers from going after each other’s pharmacy customers, Weiser also alleges.
“Both are in violation of antitrust laws and underscore the state’s argument for opposing the merger, he says.”
Weiser said yesterday that he hopes the Colorado suit, along with Washington State’s suit, will persuade the Federal Trade Commission (FTC) to try to block the deal. The FTC currently is in deliberations, but has not yet announced its decision.
Axios writes that “Kroger and Albertsons said in a statement that they are disappointed by the Colorado lawsuit while they are still in active dialogue with the FTC and other state attorneys general, adding they will ‘vigorously’ defend their merger in court.”
KC’s View:
More and more, it seems like Kroger and Albertsons may have to vigorously defend the merger in court, because to use sportscaster Bob Murphy’s iconic phrase, it appears that they are facing “nine miles of bad road.”
Between this new suit, and the vaguely desperate press release issued by Kroger earlier this week defending its record in such cases, it just feels like an FTC approval would be the real surprise.
Unless, of course, the FTC is able to extract a meaningfully better settlement than what originally was proposed by Kroger and Albertsons. And I would assume that a “better settlement” would have to satisfy the Colorado and Washington State attorneys general as well.
In the beginning, Kroger and Albertsons said they would sell 413 stores and eight distribution centers to C&S for $1.9 billion. Subsequently, they said that as many as another 200 stores could b sold to C&S if that is what it took to get the deal over the finish line.
I’ve said from the beginning that if the FTC puts its imprimatur on this acquisition, you’d want to take the over on how many stores will have to be sold to C&S – I would think that it is likely to be closer to 600 than 400. Though I still wouldn’t bet the farm, or even any of the farm animals, on how this is going to play out.
The post Colorado Sues To Block Kroger-Albertsons Deal appeared first on MNB.
View Original Article
