Albertsonson formally ended its proposed $25 billion merger with Kroger on Wednesday and sued its grocery rival, claiming Kroger broke the terms of the agreement and failed to fulfill its obligations to help the deal be approved.
The proposed tie-up was barred by a judge the day before.
According to a news statement from Albertsons, Kroger violated the terms of the merger agreement by consistently refusing to sell off assets required for antitrust approval, disregarding regulators’ advice, turning off more powerful divestment buyers, and not collaborating with Albertsons.
In a statement, Albertsons General Counsel and Chief Policy Officer Tom Moriarty said that Kroger’s self-serving actions, which were performed at the expense of Albertsons and the agreed-upon agreement, had hurt Albertsons’ shareholders, colleagues, and customers. We regret that Kroger’s purposefully inadequate strategy for obtaining regulatory permission has cost us the chance to reap the substantial benefits of the transaction.
Kroger said in a statement that the lawsuit’s claims were unfounded and without validity.
According to the company’s statement, this is blatantly an attempt to shift blame after Kroger notified them in writing of Albertsons’ repeated violations of the contract and to demand payment of the merger break fee, to which they are not legally entitled.
In an effort to compete with Walmart, Amazon, and Costco, Kroger announced ambitions to acquire Albertsons about two years ago. Nearly 40 grocery chains, including Albertsons Safeway, Fred Meyer, and Kroger, would have been consolidated under a single corporation as a result of the purchase.
The lawsuit filed on Wednesday resembles a corporate divorce struggle.
The companies are in disagreement over who should cover the merger’s legal costs and whether anyone should pay a breakup fee.
In its press release, Albertsons claimed that it was entitled to a $600 million termination fee as well as relief for the many years and hundreds of millions of dollars it spent trying to get the merger approved and the protracted, needless limbo it had to endure because of Kroger’s actions.
In contrast, Kroger resisted payments to Albertsons in its statement and stated that it is eager to address these unfounded allegations in court.
In early trading on Wednesday, Kroger’s and Albertsons’ shares were up roughly 1% and 0.5%, respectively.
More from CNBC:
-
The limits of intelligence Why AI advancement could be slowing down
-
Greece s ghost towns offer a glimpse of a country struggling with existential population collapse
-
College closures expected to spike amid unprecedented fiscal challenges, Fed research finds
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!