NEW YORK — Regulators with the Federal Trade Commission need more time to consider Kroger’s proposed acquisition of Albertsons Cos. and the related divestiture plan the retailers offered to allay antitrust concerns, according to court filings.
Kroger revealed in court filings in a California lawsuit brought by consumers seeking to halt the merger that regulators with the FTC are still not sold on the merits of the deal and are continuing to review what would be the supermarket sector’s largest consolidation ever.
In a statement this week, Kroger said it was pushing back its timeline for closing the deal. It now anticipates the closure could occur in the first half of its fiscal year, which ends in mid-August.
In announcing the bid for rival Albertsons in October 2022, Kroger CEO Rodney McMullen acknowledged that the deal triggers antitrust concerns but said the merger would lead to efficiencies and savings that would be used to lower prices and fund investments needed by Kroger to remain competitive with non-traditional food retailers such as Amazon and Walmart.
Since then, Kroger has been engaging with federal regulators in order to secure their approval. In September, Kroger and Albertsons announced a plan to sell 413 stores once the deal closes to privately held C&S Wholesale Grocers, which supplies more than 7,500 supermarkets and operates stores of its own in Vermont and New York as well as Piggly Wiggly stores in the South and Midwest.
The planned merger has galvanized opposition from the supermarket retailers’ biggest unions and others, including state officials who filed lawsuits claiming that the deal runs afoul of antitrust and consumer protection laws.
The attorney general of Washington State, where Kroger and Albertsons have about 300 stores, filed a lawsuit this week seeking to scuttle the merger. In his lawsuit, Attorney General Bob Ferguson refers to internal discussions among Albertsons executives raising doubt about the legality of the deal and expressing skepticism that it would lower prices for consumers.
McMullen last year told Bloomberg News that the supermarket giants were committed to litigation if regulators failed to approve the merger.
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