(Bloomberg) – Albertsons Cos. is demanding that Kroger Co. pay more than $9 billion for the collapse of what would have been the largest merger of U.S. grocery chains in history.
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Lawyers for Albertsons made the request Monday in Delaware Chancery Court, where a two-week trial is scheduled for later this month in a legal battle over who is responsible for the failure of the $24.6 billion deal. The plan to combine the two largest American grocery chains was blocked by a federal court in December 2024.
Albertsons wants Judge Lori Will to find that Kroger “willfully” violated the merger agreement by failing to make “best efforts” to obtain regulatory approval, including refusing to change its plan to divest certain assets. Kroger is expected to pay more than $9.3 billion, which includes the premium shareholders would have received if the deal had closed, as well as a termination fee of $600 million plus $75 million in interest and additional fees, Albertsons said.
Under the terms of the deal, Kroger agreed “to remove any antitrust impediments to the merger – without limit, except that Kroger would not have to divest more than 650 stores,” Albertsons said in the court filing. “Kroger deliberately violated these maximalist contractual commitments. Kroger wanted the merger, but only on its own terms.”
Representatives for Kroger did not provide immediate comment on Albertsons’ filing.
“Ultimately, Kroger made a promise and failed to keep it,” Albertsons said in a statement. “Kroger should be held accountable for the harm it has caused our shareholders, associates and customers – and we look forward to proving our case in court.”
If Albertsons wins its case, its shareholders will benefit. The publicly traded company counts private equity firm Cerberus Capital Management as its largest shareholder, with a stake of more than 30% as of the end of June.
The merger would have allowed Kroger, the largest U.S. grocery chain, to acquire the number two grocer, Albertsons, in an effort to strengthen competition against Amazon.com Inc., Walmart Inc. and other non-union rivals.
To gain regulatory approval, the companies agreed to sell hundreds of stores to C&S Wholesale Grocers Inc. But in December 2024, a federal judge blocked the deal after ruling in favor of the U.S. Federal Trade Commission, which argued the divestiture plan was insufficient to address antitrust concerns.
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