Washington state sues to stop $25 billion merger of Kroger and Albertsons grocery chains, claiming it will lead to higher prices
Washington State Sues to Block Kroger-Albertsons Merger
Attorney General Bob Ferguson Alleges Harm to Consumers, Higher Prices
On Monday, Washington state Attorney General Bob Ferguson filed a lawsuit to block the proposed merger between Kroger and Albertsons, two of the nation's largest grocery chains. Ferguson argued in the suit, filed in King County Superior Court, that the $25 billion deal would harm consumers and lead to higher prices. According to the lawsuit, Kroger and Albertsons have over 300 locations in the state and account for more than half of its grocery sales.
"This merger is bad for Washington shoppers and workers," Ferguson stated in a news release. "Shoppers will have fewer choices and less competition, and without a competitive marketplace, they will pay higher prices at the grocery store."
Kroger and Albertsons Respond
Kroger, headquartered in Cincinnati and owner of QFC and Fred Meyer, seeks to acquire Albertsons, based in Boise, Idaho, and owner of Safeway and Haggen. In a statement released Monday, Kroger announced a delay in the deal's closing due to ongoing discussions with regulators, including state attorneys general and the Federal Trade Commission. The company now expects the closure to occur in the first half of its fiscal year, ending in mid-August.
"While this is longer than we originally thought, we knew it was a possibility and... accounted for such potential timing," the statement said.
Kroger maintains that the merger will result in lower prices for consumers.
Union and Community Opposition
Ferguson's lawsuit received support from United Food Commercial Workers, Local 3000, representing Kroger and Albertsons employees in Washington, northeast Oregon, and northern Idaho, as reported by The Seattle Times.
"Workers, shoppers, and our communities need to prevent this proposed mega-merger from taking place," said Yasmin Ashur, a union member working at an Albertsons grocery store, in a union statement released Monday.
Background and Market Concerns
In 2022, Kroger and Albertsons agreed to merge, citing the need to compete with Walmart, Amazon, and other major players entering the grocery sector.
Last year, in an effort to pave the way for the merger, Kroger and Albertsons announced plans to sell over 400 stores and other assets to CS Wholesale Grocers, a wholesale grocery supplier, amid concerns about market dominance.
Subscribe to the CFO Daily newsletter to stay informed about trends, issues, and executives shaping corporate finance. Sign up for free.