California considers blocking Kroger merger
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California may sue to block Kroger's proposed $24.6 billion acquisition of Albertsons, which would merge two of the country's largest grocery chains, according to comments from state Attorney General Rob Bonta.
Why it matters: Bonta revealed his plans shortly after a meeting last week with U.S. Federal Trade Commission Chair Lina Khan, suggesting he's working in concert with federal antitrust regulators.
Catch up quick: Kroger and Albertsons, have been working on a megagrocer merger since October 2022.
- That deal has been under review by the FTC, which is evaluating the impact on small grocers and the risk of creating a monopoly.
- The deal has faced resistance from groups worried about prices, jobs and local competition.
- Kroger and Albertsons agreed to sell off hundreds of stores nationally, including 66 in California, to get FTC approval.
Zoom in: With dozens of stores locally, the two grocers made up 34% of the market share in the San Diego metro area in 2022.
- Kroger owns Ralph's and Food 4 Less, while Albertsons brands include Vons and Pavilions.
- Costco is the most popular grocery chain locally, but that would likely change under the merger.
Between the lines: "The state could challenge the merger on its own, or it could partner with the FTC and other states on a lawsuit," per Bloomberg.
- "California, which has the largest antitrust staff of any in the country, has filed its own merger challenges when federal enforcers have declined, notably joining with other states in an unsuccessful effort to block T-Mobile US' purchase of provider Sprint in 2020."
