Kroger Countersues Albertsons in Wake of Failed $25B Merger
Kroger countersued Albertsons on Tuesday, escalating a legal battle between the companies following the collapse of their proposed $25 billion merger in December. Albertsons terminated the merger immediately after courts blocked it and sued Kroger, alleging a breach of contract that led to the deal falling apart. Albertsons asked for billions in damages along with a $600 million termination fee. Kroger had called the claims baseless.
In its countersuit, Kroger is seeking damages from Albertsons to recover the investment it had made to obtain regulatory approval for the merger. The grocer added in the counterclaim it appeared that Albertsons had shifted its focus towards the current legal battle long before instead of pushing to close the transaction.
Total Retail's Take: The messy saga between Albertsons and Kroger continues … and is perhaps intensifying. Given the public feud following its failed merger, one has to wonder what would have happened if the merger had gone through. Would dysfunction have reigned or would the two grocers been able to integrate seamlessly for the betterment of the merged organization? Based on what I've seen in the last three months, my bet is on the former. What's evident is that there's a great deal of blame being levied between the two organizations, which has resulted in leadership changes and expensive lawsuits. The true beneficiaries of this situation may be Albertsons and Kroger's competitors, which will see two of the leaders in the grocery sector battle it out in court.
