Two Judges Block Kroger-Albertsons Merger

The Cincinnati Enquirer’s Alexander Coolidge reported Tuesday that “two judges, one federal and another in Washington state, ruled on Tuesday against Kroger’s $25 billion takeover bid for Albertsons, granting court orders blocking the deal.”

“After holding a more than three-week ‘mini-trial’ in August and September, U.S. District Court Judge Adrienne Nelson in Portland, Oregon, decided the Federal Trade Commission’s case to stop the deal was ‘likely to succeed,'” Coolidge reported. “She granted a preliminary injunction to block the merger until the agency’s in-house judge decides for or against the deal.”

“Less than an hour later, King County Superior Court Judge Marshall Ferguson ruled against the deal and issued a permanent injunction against the merger for the state of Washington, after presiding over a trial that ended in October,” Coolidge reported. “‘The evidence has shown that the proposed merger is unlawful,’ Ferguson wrote in his judgement.”

“Separately, both judges agreed with regulators the merger posed a risk to reducing competition and also expressed doubts that Kroger’s divestiture plan would alleviate the loss of a strong rival,” Coolidge reported. “Though a major setback for the grocers, the ruling is subject to appeal. Kroger said Tuesday it was ‘disappointed’ and ‘reviewing its options.’ A third antitrust lawsuit brought by the Attorney General’s Office in Colorado is still being deliberated by a state judge in Denver District Court.”

Federal Judge Blocks Merger

The New York Times’ Danielle Kaye reported that “Judge Adrienne Nelson of U.S. District Court in Oregon sided with the Federal Trade Commission in its lawsuit seeking to halt Kroger’s $24.6 billion acquisition of Albertsons, a rival grocery chain. It was a win for federal regulators who have argued that the merger would risk reducing competition at the expense of consumers and workers.”

“The grocery chains ‘engage in substantial head-to-head competition and the proposed merger would remove that competition,’ Judge Nelson said in her decision, calling the merger ‘presumptively unlawful,'” Kaye reported. “Her preliminary injunction placed the merger on shaky ground as it heads to the final step to determine the deal’s fate: the F.T.C.’s internal administrative process.”

“Kroger and Albertsons could choose to abandon their merger because of the preliminary injunction, but the order at the federal level ‘in no way forces them to do so,’ Judge Nelson added, stressing that the companies could still pursue the deal if it is deemed lawful in the F.T.C.’s administrative proceedings,” Kaye reported. “‘An injunction simply pauses the merger,’ she said.”

Statement on FTC victory securing halt to Kroger, Albertsons grocery merger: https://t.co/9kTKMXQYDG pic.twitter.com/Zr64Ua6Age

— FTC (@FTC) December 10, 2024

“Judge Nelson’s decision ‘protects competition in the grocery market, which will prevent prices from rising even more,’ Douglas Farrar, a spokesman for the F.T.C., said in a statement,” according to Kaye’s reporting. “‘This statement win makes it clear that strong, reality-based antitrust enforcement delivers real results for consumers, workers and small businesses.'”

Washington State Judge Blocks Merger, Too

Grocery Dive’s Catherine Douglas Moran, Jeff Wells, and Sam Silverstein reported that “the Washington ruling marks the second major blow to Kroger and Albertsons’ plan to combine, coming shortly after Judge Adrienne Nelson of the U.S. District Court in Portland, Oregon, issued her ruling granting a preliminary injunction in favor of the Federal Trade Commission.”

“Judge Marshall Ferguson said in court: ‘In my view, the evidence convincingly shows that the current competition between Kroger and Albertsons stores is fierce in the state of Washington. By contrast, the divestiture buyer, wholesaler C&S, with its limited retail experience and infrastructure, will not be able to replicate the ferocity of that competition or compete effectively in Washington against the colossus of a merged Kroger and Albertsons,'” Moran, Wells and Silverstein reported.

The Seattle Times’ Paul Roberts reported Tuesday that “‘This merger is over,’ said Douglas Ross, an antitrust expert at the University of Washington School of Law. ‘Antitrust lawyers can quibble with details but the odds of getting reversals of both opinions is vanishingly small.‘”