Kroger and Albertsons take their failed merger dispute to trial
Kroger and Albertsons have begun a Delaware trial over responsibility for their failed 24.6 billion dollar merger. Albertsons seeks billions in damages and a termination fee, while Kroger argues it owes nothing. Former executives are expected to testify as the court examines the companies’ efforts to win competition approval and their disputed store-sale plan.
Economics & Markets··Morning
Former partners dispute responsibility in Delaware
US supermarket chains Kroger and Albertsons have taken their dispute over a failed merger to trial in the Delaware Court of Chancery, the US state’s business court. Proceedings began on October 19. The companies are contesting what each was required to do to secure competition approval for the proposed 24.6 billion dollar combination, which collapsed in December 2024.[1], [2]
Albertsons seeks a 600 million dollar termination fee and billions more for alleged shareholder losses after the collapse. Kroger argues that it owes Albertsons nothing and says both sides understood how difficult regulatory approval would be. Albertsons’ demands remain claims before the court; no damages award has been announced in the opening of this trial.[1]
Store sales sit at the centre of the allegations
Two judges blocked the merger on antitrust grounds before Albertsons terminated it. The Federal Trade Commission and state attorneys general had challenged the transaction. A central issue now concerns the stores and assets that C&S Wholesale Grocers, a US grocery wholesaler, was supposed to buy to address competition concerns. Albertsons accuses Kroger of failing to make sufficient efforts to satisfy regulators.[1]
The proposed divestiture package grew from 238 stores to 579. Albertsons alleges that Kroger selected weaker stores while retaining its most profitable locations. Kroger says it spent more than 1 billion dollars pursuing the transaction and argues that regulators defined supermarket competition too narrowly. The original agreement capped divestitures at 650 stores; Kroger says meeting regulatory demands would have required more.[2]
Former chief executives are expected to testify
Former Albertsons chief executive Vivek Sankaran and former Kroger chief executive Rodney McMullen are among the expected witnesses. Lawyers who advised the companies on competition issues are also expected to take the stand. The witness list includes Albertsons adviser Ted Hassi, Kroger adviser Michael Bernstein and Albertsons mergers and corporate-affairs executive Tom Moriarty.[1], [2]
Judge Lori Will will decide the case without a jury. Hearings are scheduled to last two weeks, while a ruling could take months. The companies can appeal the decision to the Delaware Supreme Court. The proceedings concern contractual responsibility for the failed transaction, with each company continuing to dispute the other’s account of why the merger did not proceed.[2]
