Kroger-Albertsons Deal Goes on Trial in Washington as FTC Case Comes to Close -- WSJ

By Patrick Thomas

As Kroger and Albertsons make their closing arguments this week in an Oregon federal court on their $20 billion merger, a separate case challenging the tie-up kicked off today in Washington state.

Washington Attorney General Bob Ferguson filed a lawsuit in January to block supermarket giant Kroger's takeover of rival Albertsons. The state's lawsuit was the first to challenge the deal, which would combine the two largest U.S. supermarket operators.

The Federal Trade Commission sued to block the deal a month later. The FTC's case is in the final two days of a trial seeking to persuade a federal judge to issue an injunction that would block the companies' planned combination.

Washington is one of the states where Kroger and Albertsons overlap most. The state's lawsuit alleges that the two chains combined account for more than 50% of supermarket sales in the state and compete head-to-head in many communities.

In their opening statements in Washington on Monday, the companies' lawyers said that the deal is necessary to compete with Walmart and Amazon. The merger will increase Kroger's leverage with suppliers and its ability to lower prices at Albertsons stores that in Washington run higher than Kroger's locations, said Mark Perry, an attorney for Kroger.

Albertsons attorney Enu Mainigi said it is becoming harder for the company to compete with new low-price grocery competitors such as Aldi and dollar stores. She said Albertsons would have to consider closing stores, exiting certain markets, or laying off workers if the deal doesn't happen.

"The traditional one-stop-shop supermarket is a thing of the past," she said.

Shares of Kroger were up about 1% on Monday, while Albertsons declined slightly. Albertsons stock is down nearly 9% over the past month while Kroger is up about 6%.

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September 16, 2024 14:58 ET (18:58 GMT)

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