Proposed Kroger, Albertsons merger delayed
The proposed merger between two U.S. supermarket giants is no longer expected to be completed in March.
The Kroger Co.’s proposed $24.6 billion acquisition of rival Albertsons is now expected to close in the first half of Kroger’s fiscal year 2024 instead of early this year, according to a joint statement made by The Kroger Co., Albertsons Cos. Inc. and C&S Wholesale Grocers LLC. The statement cited ongoing discussions with regulators as delaying the closing of the deal.
The first half of Kroger’s fiscal 2024 ends on Aug. 17.
“While this is longer than we originally thought, we knew it was a possibility and our merger agreement and divestiture plan accounted for such potential timing,” the statement read. “We remain committed to closing the transaction and providing the meaningful and measurable benefits that we promised when we originally announced the transaction."
The companies said they remain in active and ongoing dialogue with the Federal Trade Commission and individual state attorneys general regarding their proposed merger and divestiture plan.
Seeking approval for the deal, Kroger in September agreed to divest 413 stores and eight distribution centers to C&S Wholesale. C&S, the largest wholesale grocery supply company in the U.S., also operates Grand Union grocery stores and Piggly Wiggly franchise and corporate-owned stores in the Midwest and Carolinas.
News of the delay comes as the deal, which has been heavily criticized by U.S. lawmakers over antitrust concerns, faces more opposition. On Jan. 15, Washington state regulators filed a lawsuit to stop the proposed merger. In the suit, Washington Attorney General Bob Ferguson argued that the multibillion-dollar deal would jeopardize workers’ jobs, reduce competition and result in higher prices, reported the Cincinnati Enquirer.
In January, the International Brotherhood of Teamsters asked the FTC to reject the sale of Kroger or Albertsons Cos. assets to C&S as proposed, saying that the deal puts members’ jobs at risk. C&S said that it's committed to recognize the union workforce and maintain all collective bargaining agreements, as well as to retaining front-line employees.
Kroger has also said it will protect union jobs and that no stores will close or front-line employees lose their jobs as a result of the merger. It will invest an incremental $1 billion to raise wages and comprehensive benefits for all associates post-close.
After the deal closes, Kroger said it will provide 700,000-plus part- and full-time associates access to its continuing-education benefit, which offers up to $21,000 of reimbursement toward higher learning or continued development.