Breaking News: Albertsons and Kroger Mega Merger Dies in the Northwest

In 2022 the grocery industry was set ablaze when Albertsons and Kroger announced the largest supermarket chain merger in history. Two of the top five grocery retail chains in the U.S. were set to join forces and become the kind of juggernaut that could even match Walmart. Immediately, concern began to circulate over what this merger would mean for competition in the industry. A merger of this magnitude could effectively stamp out smaller competitors and only leave room for the biggest players. Those concerns are what led to a federal judge in Oregon officially blocking the merger. The Albertsons and Kroger merger has been terminated and a shocking lawsuit by Albertsons almost guarantees it will never exist again.

The two companies spent the last two years battling regulators who raised concerns over what this deal would do to other grocery companies, especially the smaller ones. The companies attempted to address regulatory concerns by agreeing to divest some of their locations. At one point, they agreed to sell 579 stores across 22 states that both companies competed in. Despite these concessions, regulators were still against the deal, particularly in Washington and Oregon, where the deal eventually died. Following a three-week hearing that was recently held in Portland, U.S. District Court Judge Adrienne Nelson issued a preliminary injunction blocking the deal. On the same day, Judge Marshall Ferguson in Seattle issued a permanent injunction after deciding that the merger would violate Washington’s consumer-protection laws and harm competition.

Normally, those injunctions are where the two companies would have a difficult decision to make. They could appeal the decision, yet the timeframe for an appeal would be costly and could cause the deal to fall apart. The companies could have also terminated the merger and worked out the framework for a new deal in the future. In this case, Albertsons chose the nuclear option by terminating the deal and then suing Kroger for breach of contract. Albertsons alleges that Kroger failed to take all necessary actions to secure the merger. Such drastic action by Albertsons has all but poisoned the well of a future deal between these two companies. It also decreases the likelihood that another company would want to enter into a deal with Albertsons at a later date.

Regardless of how the lawsuit resolves, the merger is dead. Competitors no longer have to fear the unstoppable force that Albertsons was about to become. A precedent has now been set and it will likely be a long time before we see another merger like this one.