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The Federal Trade Commission has filed a lawsuit to prevent the proposed merger between Kroger and Albertsons. The FTC claims the largest supermarket merger in history is anti-competitive, leading to higher prices for millions of consumers. The lawsuit also claims that grocery store workers would suffer under the deal. The attorney generals from nine states are joining the federal lawsuit.
Kroger's offer for Albertsons would combine numerous supermarket banners, nearly 5,000 stores, and result in 15-16% of the U.S. grocery market share.
Anti-trust regulators have prevented other mergers in the food sector, including Sysco and U.S. Food’s merger in 2015. Walgreens was unable to acquire Rite Aid in 2015 after regulators said it would be anti-competitive. Three years later, Albertsons was prevented from acquiring Rite Aid. In 2020, King Cullen and Stop & Shop had to call off their merger after two years of talks with regulators. Regulators did not consider increased openings from hard discounters like Lidl to be competition.
Paul Glenchur, Hedgeye's Senior Policy analyst, focused on regulatory and competition policy issues involving the Justice Department and the FTC, will join us on the call and add his legal expertise to the analysis. Paul is a member of the American Bar Association Antitrust Section and the Supreme Court Bar. Paul served as an attorney at the FCC and in private practice. In addition, he served as a judicial law clerk in the U.S. Court of Appeals for the Ninth Circuit. Paul will provide his thoughts on the relevant cases, what to expect over the next year+, and the following steps to look for.
