A group of lawmakers has called on the US Federal Trade Commission (FTC) to block Kroger’s planned $24.6bn acquisition of Albertsons.
The lawmakers include Senator Elizabeth Warren, Mazie Hirono, Bernie Sanders, Cory Booker and representatives Summer Lee and Alexandria Ocasio-Cortez.
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Kroger signed a definitive agreement to acquire all of Albertsons’ outstanding shares for $34.10 per share in October 2022.
The merger faces opposition from consumer groups and US state secretaries over fears that it would reduce competition in the grocery market.
In September 2023, Kroger and Albertsons proposed to divest some businesses to C&S Wholesale Grocers, as they aim to complete the merger in early 2024.
But in a letter sent to the FTC, the lawmakers claim that the proposed divesture is not a remedy, and that the merger would still harm consumers, workers and the grocery market.
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By GlobalDataThey stated: “As members of Congress have previously raised, structural and behavioural remedies are difficult to administer and enforce and cease to be binding once the term of the agreement ends, and they often fail to maintain competitive conditions because, as stated previously, companies have an incentive to ensure that the businesses they spin off do not succeed.
“Furthermore, they encourage companies to “litigate the fix” by proposing remedies during ongoing litigation to distract a judge’s focus from the original antitrust violations of the merger. But in addition to these general concerns, past experience with Albertsons’ structural remedies indicates that the new proposal will not cure the anticompetitive harms of the deal.”
“This merger will harm consumers, workers, farmers and other food suppliers across the country, and the proposed divestiture will not resolve the concerns. We ask that the FTC should use its authority under the Clayton Act, the Sherman Act and the Federal Trade Commission Act to prevent the companies from merging.”
The lawmakers’ letter comes as the FTC’s deadline to act on the merger approaches on 15 December 2023.
Kroger will not close any stores, distribution centres or manufacturing facilities due to the merger, Reuters has reported.
The retailer also refuses to lay off any frontline associates.
