Washington State Attorney General is prepared to file a lawsuit to challenge Kroger Co.’s proposed acquisition of Albertsons Cos., according to an unidentified individual with knowledge of the plan. The anticipated lawsuit would be filed in state court. The US Federal Trade Commission and other states investigating the transaction are not involved in the Washington State lawsuit.
If it were successful, the merger of Kroger-Albertsons would result in almost 5,000 stores across the US under various names including Kroger, Ralphs, Albertsons, Safeway, Acme and Jewel-Osco, among others. The two largest grocers in the US, who are direct competitors in numerous markets, have agreed to divest 413 stores to C&S Wholesale Grocers Inc. This action aims to alleviate potential antitrust issues. California will feel the greatest impact from the deal, with Washington State coming in second.
Despite this, a spokesperson for Albertsons insists that the union would “expand competition, lower prices, protect union jobs, and enhance customers’ shopping experience.” They argue that the continued dominance of big non-union retailers such as Amazon and Walmart in the grocery space would be the primary beneficiaries if the deal was blocked.
Kroger’s spokesperson has voiced a similar sentiment, stating that the acquisition would lead to increased wages for workers. Conversely, they deem the lawsuit as “premature” as discussions with the FTC and other states are ongoing.
Attorney General Bob Ferguson and his agency did not make any announcements on Thursday. Ferguson, who is running for governor in the coming elections, had previously attempted to prevent Albertsons from disbursing $4 billion to shareholders as a special dividend post the announcement of the Kroger transaction. This lawsuit, however, was not successful. Even though these tasks can be performed separately, state attorneys general typically coordinate with federal enforcers on cases.
The Teamsters union, representing many warehouse employees and truck drivers, and the United Food and Commercial Workers International, mainly representing in-store workers, are opposed to the merger. Antitrust scrutiny from the FTC and other states continues, with both California and Arizona expressing major reservations about the deal.
Original article here.