Cautiously Optimistic

Reuters reports that the merger of Kroger and Albertsons has been blocked at least temporarily:

Dec 10 (Reuters) – A U.S. judge blocked the pending $25-billion merger of U.S. grocery chains Kroger KR.N and Albertsons (ACI.N), opens new tab on Tuesday, a win for the Federal Trade Commission that Kroger has said would likely scuttle the deal.

The FTC argued at a three-week trial in Portland, Oregon, that the merger would eliminate head-to-head competition between the top two traditional grocery chains, leading to higher prices for shoppers and reduced bargaining leverage for unionized workers.

The ruling, which could be appealed, is a big victory for FTC Chair Lina Khan and the Biden administration in their bid to counter inflation at the checkout. Americans’ discontent over a lingering rise in grocery prices since the pandemic was a key theme in the run-up to President-elect Donald Trump’s win in November.

U.S. District Judge Adrienne Nelson agreed in the ruling that the merger was likely to remove direct competition between the two grocers, which would make it unlawful.

I’m suspicious of such mega-mergers generally. In this particular case I suspect the primary beneficiaries would be a handful of stockholders.

Personally, it may mean that our Mariano’s store will remain open for a while. If the merger went through it was slated to close.

0 comments… add one

Leave a Comment