Supermarket chain Albertsons wants its top rival Kroger to pay it at least $8 billion after their grocery megadeal imploded two years ago.
Albertsons is accusing Kroger leaders of making "lowball offers" to federal regulators to largely keep the most-profitable stores in the combined company, and hive off the weaker-performing ones, according to a court filing unsealed Monday.
The filing is part of Albertsons' lawsuit against Kroger in Delaware Chancery Court following the companies' failed deal. A bench trial is slated to begin Oct. 19 and the proceeding is expected to last about two weeks.
Albertsons said it is owed lost merger premiums and interest. The amount it is seeking includes a $600 million breakup fee that Kroger previously agreed to pay but didn't after the deal was dropped.
Kroger representatives didn't immediately comment.
The trial reflects the journey that Kroger and Albertsons have taken from industry rivals to potential merger partners to competitors again over the span over the last four years.
Since the deal fell apart, both companies have struggled. Grocers are reeling from rising costs, while cash-strapped shoppers cut back on their habits and flock to rival discount stores. The pain is acute at Albertsons: Its shares are down about 30% over the past 12 months, bringing its market value to around $6 billion.
Kroger in 2022 agreed to buy Albertsons for $20 billion, uniting the No. 1 and No. 2 U.S. supermarket chains by store count. The combined company would have nearly 5,000 stores under Kroger banners including Fred Meyer, Roundy's and Mariano's with the owner of Safeway, Vons and Jewel-Osco.
The goal was to create a bigger grocery competitor to megaretailers such as Walmart and Amazon and discount grocers like Aldi, which have the scale and buying power to undercut supermarket shelf prices.
To ease concerns about the deal, the companies offered to sell hundreds of stores to grocery distributor C&S Wholesale Grocers. The Federal Trade Commission sued in 2024 to block the deal, claiming that reduced competition would raise grocery prices.
A Portland federal court judge later blocked the deal on antitrust grounds. The day after the ruling, Albertsons sued its former deal partner, alleging Kroger didn't do enough to secure regulatory approval. Kroger has called Albertsons' claims baseless and said it isn't owed the breakup fee.
Kroger and Albertsons each spent about $1 billion on deal-related costs, including lawyer and consulting fees.
In the court filing Monday, Albertsons said Kroger leadership gave priority to keeping stores that would help it hit specific financial targets once it completed its deal to acquire Albertsons' more than 2,000 stores. It pointed to a $400 million bonus pool that former Chief Executive Rodney McMullen established for executives based on profit targets after the deal closed.
During the heat of their federal antitrust trial in 2024, Albertsons' then-CEO Vivek Sankaran called his counterpart at Kroger with a last-ditch request to help ease regulators' concerns, according to the filing.
Sankaran offered to lower the deal price by $800 million, but asked McMullen to divest more stores from the combined company. McMullen snubbed the offer and never formally discussed it with the Kroger board, the filing said.
McMullen and Sankaran didn't immediately respond to requests for comment.
"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," Albertsons said in a statement.
Sankaran retired last year and Albertsons succeeded him with current CEO Susan Morris. McMullen left Kroger in March 2025 after an undisclosed ethics violation.
Kroger meanwhile has brought in a new CEO, Walmart veteran Greg Foran. The company is hiring executives from Foran's former employer and moving quickly to implement many of its tactics, such as offering low prices, cutting costs and negotiating more aggressively with suppliers.
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