California Attorney General (AG) Rob Bonta is considering filing a lawsuit to block the Kroger-Albertsons merger deal, according to a report by Reuters.

No decision has been made yet; however, Rob Bonta was quoted by Bloomberg as saying: “We are moving toward acting. Right now, there’s not a lot of reason not to sue.”

In October 2022, Kroger entered a definitive agreement to acquire all of Albertsons’ outstanding shares for $34.10 to a share, valuing the company at approximately $24.6bn in total.

The deal, if materialised, would create a retail giant with a network of 4,996 stores, 66 distribution centres, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centres.

It is subject to customary closing conditions, including Federal Trade Commission (FTC) and other governmental clearance.

Last month, Kroger and Albertsons announced plans to divest 413 stores to C&S Wholesale Grocers for approximately $1.9bn to expedite the merger.

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The FTC is said to be conducting its own review of the merger.

If the state proceeds with the lawsuit, California could partner with the FTC and other states or challenge the deal independently.

In August this year, secretaries of seven US states urged FTC chair Lina Khan to stop the proposed acquisition of grocery retailer Albertsons by Kroger.

In the letter, the officials wrote: “This corporate merger will put an even larger strain on American families who are already struggling to pay the bills and keep food on the table. Government must stand up to corporate greed as it has done in the past to ensure there is a competitive marketplace for essential goods and services.”