The proposed $24.6 billion merger between the Kroger Co. and Albertsons Companies Inc. is temporarily on hold as of Thursday, July 25, until an antitrust case by Colorado Attorney General Phil Weiser seeking to halt the deal is settled by the Colorado District Court. Albertsons bought Safeway in 2016 for $9.4 billion.
“I am pleased that Kroger and Albertsons agreed to halt their plans to merge until the court rules on the state’s lawsuit to permanently block the grocery merger,” Weiser said in a statement about the proposed merger, which was announced in October 2022. “This is great news for shoppers, workers, farmers and other suppliers, who can rest assured that this mega-merger will not go into effect during harvest season and while kids are headed back to school.”
District Judge Andrew J. Luxen issued a preliminary injunction Thursday morning that was accepted by all parties, including C&S Wholesale Grocers, LLC. If the merger goes ahead, C&S has agreed to purchase a total of 579 stores across the nation, including the Safeway at 1635 E. Cottonwood Street in Cottonwood, all four Prescott-area Safeway stores and all three Flagstaff Safeway stores.
Under the agreement, C&S will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado. Kroger will rebanner the Albertsons and Safeway stores it owns in Arizona.
Luxen had previously rejected a motion by Albertsons and Krogers to dismiss the state of Colorado’s lawsuit over the proposed merger.
In its divestiture plan, Kroger stated that the sale of the stores will ensure that none of the stores will be closed, that the employees will be retained and that “existing collective bargaining agreements will be honored,” as well as health care and pension benefits.
Conversely, the Federal Trade Commission, which sued to block the proposed merger in February, contended that if the merger goes through it will lead to lower wages for workers and higher grocery prices for customers.
A trial in the Colorado antitrust suit is set for Sept. 30.
“My office looks forward to making the case that this merger will eliminate competition and impact food prices, jobs and consumer choice,” Weiser said in the statement.
