Albertsons seeks billions from Kroger after the collapse of their $24.6 billion merger. Lawyers for Albertsons filed the demand Monday in Delaware Chancery Court, asking for more than $9 billion tied to the failed deal. The case now turns on whether Kroger used the required effort to win approval or pushed ahead on its own terms.
Lori Will and $9.3 billion
More than $9.3 billion is the figure Albertsons says Kroger owes, including the premium stockholders would have received if the deal had closed, a $600 million termination fee, $75 million in interest and additional costs. The company is asking Judge Lori Will to sort out whether the damage claim reflects the collapse of the transaction or Kroger’s conduct in getting there.
Two weeks of testimony are slated later this month in Delaware Chancery Court. That hearing will sit at the center of a dispute over one of the largest US grocery chain merger in history, with Albertsons and Kroger no longer tied together by the agreement they signed.
Albertsons and Kroger fight
Albertsons said Kroger breached the merger agreement “willfully” and failed to use “best efforts” to obtain regulatory approval. In its filing, Albertsons said, “Kroger willfully breached these maximalist contractual commitments. Kroger wanted the Merger but only on its own terms.”
Albertsons also said, “The bottom line is that Kroger made a promise and broke it.” It added, “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 has said it did everything it could to secure approval and accused Albertsons of undermining its divestiture proposal. The companies had planned to sell hundreds of stores to C&S Wholesale Grocers Inc. to address antitrust concerns, with Kroger agreeing to remove any antitrust impediment unless it had to divest more than 650 stores.
December 2024 ruling
In December 2024, a federal judge blocked the $24.6 billion deal after ruling in favor of the US Federal Trade Commission. Albertsons terminated the agreement and sued Kroger after that ruling, turning the failed merger into a damages fight that now asks how much of the collapse should be paid back.
At the end of June, Cerberus Capital Management held more than a 30% stake in Albertsons, leaving its investors exposed to whatever recovery the court allows. If Judge Lori Will finds Kroger did not meet its contractual obligations, the size of the award could determine how much value Albertsons stockholders recover from a deal that never closed.
