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A court action brought by the Federal Trade Commission (FTC) with the states of Oregon, Arizona, California, Illinois, Maryland, Nevada, New Mexico, Wyoming, and the District of Columbia against Kroger company and Albertsons companies resulted in a significant win for FTC.
The court ruling will likely end the Krogers proposed deal to buy Albertsons, creating a mega grocery store chain.
Court Decides In Favour Of FTC In Krogers Proposed Buyout Of Albertsons
On Tuesday, a motion for preliminary injunction of Kroger’s proposal to buy Albertsons was granted.
The Oregon judge, US District Judge Adrienne Nelson, indicated that the FTC, joined by several states, is likely to succeed on the merits of their primary application against the grocery chains.
The equities weigh in favor of an injunction. The motion for a preliminary injunction was granted as the judge found that the takeover would lessen competition for US grocery shoppers.
On the same day, a Washington judge blocked the deal in that state, and a separate lawsuit filed by Colorado’s attorney general remains pending.
In her ruling, the Oregon judge indicated that the Kroger deal is”structured in a way that will significantly disadvantage C&S as a competitor.
She also noted the risk that some or all of the stores concerned will lose sales or close. The court ruling is seen as a significant victory for the FTC and outgoing Chair Lina Khan.
Reaction To Kroger Deal Court Ruling
A Kroger spokesperson said the merger would have led to price cuts, higher worker wages, and improved stores, and the company is disappointed in the opinions issued. Both Kroger and Albertsons are reviewing their options as they relate to the merger.
Still, their attorneys had indicated before the ruling that the acquisition would probably be called off if the judge ruled against the deal.
On the Stock Exchange, Albertsons fell 2.3% to $18.51 in New York trading, while Kroger rose 5.1% to $60.73. FTC spokesperson Douglas Farrar said the victory confirms that strong, reality-based antitrust enforcement delivers actual results for consumers, workers, and small businesses.
He said, “Today’s win protects competition in the grocery market, which will prevent prices from rising even more.”
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