US supermarket group Albertsons has launched legal action demanding more than $9bn from Kroger following the collapse of the planned merger.
A two-week court hearing is set to start later this month to establish legal responsibility for the collapse of the $24.6bn buyout.
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The planned acquisition would have united the two “largest” grocery operators in the US, according to Bloomberg, to rival Walmart and Amazon.
Albertsons claims that Kroger deliberately breached the contract by failing to make “best efforts” to obtain antitrust sign-off, pointing to an unwillingness to modify store sell-off arrangements.
Contractual stipulations obliged Kroger to resolve competition hurdles while capping store disposals at 650 outlets.
The damages Albertsons is pursuing exceed $9.3bn, covering deal premium payments designated for equity holders upon closing, a break fee of $600m, alongside $75m in costs and accumulated interest.
Albertsons said: “Kroger willfully breached these maximalist contractual commitments. Kroger wanted the merger but only on its own terms.”
The firm added: “The bottom line is that Kroger made a promise and broke it. Kroger should be held accountable for the harm it caused our shareholders, associates, and customers – and we look forward to proving our case in court.”
Kroger disputes any financial liability, contending that Albertsons neglected its own promises under the deal and forfeited any right to the termination payment.
It labelled Albertsons’ wider financial demands a “far-fetched” concept centred on anticipated tax levies on the deal premium.
Maintaining that regulatory assent was impossible without exceeding the agreed 650-shop threshold, Kroger noted expenditure surpassing $1bn alongside “countless hours of personnel time in pursuit of the deal”.
It additionally accused Albertsons of covertly partnering with prospective purchaser C&S Wholesale Grocers to demand further store sales.
Attorneys for Kroger argued: “Crediting Albertsons’ endless second-guessing would convert the contractual control over regulatory strategy that is traditionally accorded to the acquiror into a guaranteed payout for the target company should regulatory efforts fall short”.
The tie-up was halted by a federal judge in December 2024 after an intervention by the US Federal Trade Commission, which argued that offloading shops to C&S Wholesale Grocers failed to eliminate antitrust concerns.
Albertsons subsequently scrapped the pact.
