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Federal regulators still have time to decide on Kroger’s pending $26.4 billion acquisition of Albertsons.
The companies and the Federal Trade Commission have agreed to move a key decision date from December to January 17, according to filings in a California lawsuit seeking to block the largest retail acquisition in U.S. history.
Both the FTC and Kroger declined to comment on when regulators plan to reveal their evaluation of the deal. The agency could allow or force Kroger to proceed with the sale of more than 413 stores it has proposed selling to address antitrust concerns. There is also a possibility that a lawsuit will be filed seeking an injunction to halt the merger.
The California lawsuit was filed in February by San Francisco attorney Joseph Alioto on behalf of consumers in California and other states. It argues that a merger between the two largest supermarket chains would “significantly reduce competition and tend to create a monopoly” in some regions of the United States.
Last month, Kroger filed a plan with the FTC to sell 413 stores, including 26 in Texas and two in Louisiana, to C&S Wholesale Grocers.
The FTC’s review also takes into account planned sales. Teamsters and progressive lawmakers have criticized the sale to C&S as part of their overall opposition to Kroger’s acquisition of its largest competitor. Critics cite Albertsons’ acquisition of Safeway in 2015 as a warning that buyout treatments are not achieving desired results.
Scott Moses, an investment banker who is advising Albertsons on the pending deal, in a statement late Thursday cited C&S’ prospects as the buyer for acquiring the stores as part of the acquisition by Albertsons. He said it was incorrect to compare it to Hagen, a grocery store that later went bankrupt. Safe way.
Hagen was a chain with 18 stores in Oregon and Washington when it acquired 146 stores in Southern California, Arizona and Nevada and converted to its own brand. Those stores were “more than 1,000 miles away from where most people had heard of Hagen,” Moses said.
“C&S is a fundamentally stronger buyer than Hagen in several important respects,” he said.
He said the company is a family-run grocery wholesaler with $30 billion in annual revenue and operates stores in multiple regions. He added that the company is pro-union and predicated on collective bargaining agreements.
Most divested stores won’t suddenly change their storefront brand names. The sale to C&S includes three banners: QFC in Washington and Oregon, Marianos in Illinois and Cars in Alaska. C&S will also be able to use the Albertsons flag in Arizona, California, Colorado and Wyoming.
It’s unclear what will happen to the 26 Texas stores that were sold, but C&S may convert them into Piggly Wiggly stores under its own brand.
“The C&S deal clearly avoids Mr. Haggen’s mistake,” Mr. Moses said.
The merger between Kroger and Albertsons would create “another strong grocery store competitor” to compete with national chains Walmart, Target, Amazon, Whole Foods Market, Costco, Aldi and Dollar General. Mr. Moses said. Kroger and Albertsons have grown primarily through acquisitions.
Several regional chains have successfully competed against national chains, including HEB and Brookshire’s in Texas, Publix in the Southeast, Wegmans in the Northeast, and Schnucks in Missouri.
In addition to the Kroger brand, the Ohio-based grocer also sells Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owens, Jay-C, Pay Less, Baker’s, Gerv’s, Harris Teeter, We operate Pick and Save, Metro. Market, Marianos, Fred Meyer, Food 4 Less, Foods Company.
Additional banners for Albertsons are Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci’s Food Lovers Market.
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