| Logo2: | Albertsons Companies (logo).svg |
| Initiator: | Kroger |
| Target: | Albertsons |
| Type: | Full acquisition |
| Cost: | $24.6 billion |
| Initiated: | October 14, 2022 |
The Kroger–Albertsons acquisition is a planned acquisition between the two American grocery chains which serve most of the country's mid-tier grocery market, Kroger and Albertsons. Kroger plans to compete with non-union grocery chain Amazon Fresh, which includes Whole Foods Market, discount department store chains Target and Walmart, and the warehouse club retail chains Costco and Sam's Club.
Announced in October 2022, Kroger, one of the largest supermarket chains in the United States, agreed to purchase Albertsons for $24.6 billion.[1] This merger, if approved, would create one of the largest grocery store chains in the US, combining nearly 5,000 stores and employing approximately 700,000 people.[2]
Albertsons merged with Safeway in 2015 in a $9.2 billion deal which included an FTC requirement to spin off 168 stores to stop the new company having a monopoly in certain markets.[3] The commitment was the largest ever divestiture of supermarkets at the time.[4] 146 stores were sold to Haggen, a Washington supermarket chain, for around $300 milion. The deal was closed in January 2015; Haggen ended up announcing in August that it would close or sell around a fifth of its stores,[5] and in September sued Albertsons for allegedly sabotaging its expansion, before filing for bankruptcy.[6] Albertsons bought 33 former Haggen stores for $14.3 million at a bankruptcy auction in November, many for the nominal price of $1 since they came with liabilities as part of their sale. The failure of the spin-off of stores to Haggen has been seen as a particular concern for the proposed Albertsons–Kroger merger.
In October 2022, Kroger agreed to buy Albertsons for $34.10 per share, valuing the deal at $24.6 billion.[1] The acquisition aims to enhance Kroger’s competitive edge by expanding its market presence and leveraging economies of scale to offer better prices and services to customers. However, the merger has faced significant scrutiny from regulators and opposition from various stakeholders.[7]
In May 2023, the UFCW International announced their opposition to the deal.[8] The International Brotherhood of Teamsters also oppose the deal,[9] saying it "threatens jobs, wages, and benefits for thousands of workers".[10]
The Federal Trade Commission (FTC) and several state attorneys general have raised concerns about the potential anticompetitive effects of the merger. The FTC filed a lawsuit in February 2024 to block the acquisition, arguing that it would reduce competition, lead to higher grocery prices, and negatively impact workers’ wages and benefits. Additionally, the state attorney general for Washington filed a separate lawsuit, citing internal communications from Albertsons’ executives that questioned the legality and consumer benefits of the deal.[11]
On November 29, 2022, the chief executives of the two companies went before the antitrust panel of the Senate Judiciary Committee to defend the merger.[12]
As of mid-2024, the acquisition is still under review by federal and state regulators. Ongoing negotiations and legal challenges have delayed the completion of the deal, with a final decision expected by mid-August 2024. In January 2024, Bob Ferguson, the Washington Attorney General filed a lawsuit to stop the merger. [13] In February 2024, Colorado Attorney General Phil Weiser filed a lawsuit in an attempt to stop the merger due to his belief that it would greatly reduce competition and harm Coloradans.[14]
To address regulatory concerns, Kroger and Albertsons have proposed divesting 579 stores across various locations to C&S Wholesale Grocers. This divestiture is intended to maintain competitive balance in the grocery market and alleviate fears of a monopoly.[15]