Axios Pro Exclusive Content

Kroger-Albertsons' proposed divestitures get lawmaker pushback

Dec 12, 2023
Data: Axios; Chart: Axios Visuals
Data: Axios; Chart: Axios Visuals

Six U.S. lawmakers are trying to throw yet another wrench into the $24.6 billion Kroger-Albertsons deal.

Why it matters: It's ammunition for the Federal Trade Commission, which is still deciding whether to challenge the merger.

What they're saying: In a letter to the FTC, the lawmakers said that Kroger's proposed divestitures to C&S Wholesale Grocers "wouldn't ameliorate harms to consumers, workers, and the grocery industry as a whole if the merger is allowed."

  • The letter was signed by Sens. Elizabeth Warren, Mazie Hirono, Bernie Sanders and Cory Booker, and Reps. Summer Lee and Alexandria Ocasio-Cortez.
  • Such divestitures, the lawmakers argue, don't do enough to maintain competitive conditions because companies are incentivized to ensure spun-off businesses don't succeed, per the letter.

Catch up fast: In September, Kroger and Albertsons agreed to sell 413 stores and select assets to C&S Wholesale Grocers for $1.9 billion in a Softbank-backed deal to appease regulators.

  • Kroger and Albertsons say they've demonstrated compliance with antitrust requirements as of Nov. 15, triggering a 30-day timeline in which the FTC must either accept the deal or sue to block it.
  • The two parties can delay a final decision to continue negotiations.

The other side: Kroger maintains the divestitures will bring higher wages and expanded benefits to workers and yield lower prices and more fresh food choices for customers.

  • "C&S is critical to bringing these meaningful and measurable benefits to America's consumers and grocery workers through their commitments to maintain all collective bargaining agreements," a Kroger spokesperson said in an emailed statement.
  • "If the merger is blocked, the non-union retailers like Walmart and Amazon will become even more powerful and unaccountable — and that's bad for everyone," the spokesperson adds.

The intrigue: Some lawmakers, like Reps. Greg Landsman and Brian Fitzpatrick, have expressed support for the deal, per Reuters.

What's next: Kroger and Albertsons hope to close the transaction by early 2024, following the completion of the FTC's antitrust review.

  • The transaction could be terminated if it does not close on or before Jan. 13, 2024, though that date could be extended to Oct. 9.
  • The FTC will likely make a decision sometime next year on whether it will bring a challenge.

The FTC declined to comment.

Go deeper