Kroger and Albertsons are two of the largest grocery retailers in the US, and they announced their $24.6 billion merger in October 2022. The merger would create a grocery empire with about 5,000 stores across the US, competing with other industry giants.
However, the merger faces opposition from the Federal Trade Commission, which is scrutinizing its impact on grocery competition. The FTC has recently challenged high-profile deals in other industries under Chairman Lina Khan, who is known for her critical views on corporate power.
Labor unions and officials from a range of states have also urged the FTC to block the merger, saying it would hurt wages and competition. Some Members of Congress have also criticized the transaction, and the Senate Judiciary Committee held a hearing on the merger in November 2022.
On September 8, 2023, in an effort to win antitrust approval, Kroger and Albertsons agreed to sell 413 stores to C&S Wholesale Grocers for $1.9 billion in cash . C&S Wholesale Grocers is a major grocery wholesaler that also operates Grand Union and Piggly Wiggly stores.
The deal covers stores in 17 states and the District of Columbia, along with eight distribution centers and five private-label brands. C&S will also get exclusive licensing rights to the Albertsons brand name in four states. To win regulator approval Kroger may require C&S to buy a further 237, which would bring the total divestitures to 650 stores.
Kroger and Albertsons said that the divestiture plan marks a key next step toward the completion of the merger, which they expect to close in early 2024. They also said that frontline workers will remain employed and existing collective-bargaining agreements will continue. Kroger CEO Rodney McMullen has vowed to fight in court if necessary to achieve the merger.
