A federal judge on Tuesday issued a preliminary injunction to temporarily block the $24.6 billion merger between Kroger and Albertsons, the largest proposed grocery store merger in U.S. history. The decision sides with the Federal Trade Commission (FTC), which argues that the deal would harm competition, consumers, and workers.
Announced in 2022, the merger sought to combine the fifth and tenth largest retailers in the country to better compete against non-unionized giants like Walmart, Amazon, and Costco. Kroger CEO Rodney McMullen argued the deal would make them a stronger alternative to these competitors, pledging to lower grocery prices by $1 billion post-merger.
Judge Adrienne Nelson’s decision is a major setback for the two grocery giants, casting doubt on the likelihood of the merger. The companies, which include chains such as Safeway, Vons, Harris Teeter, and Fred Meyer, have not yet commented on the ruling.
Judge Adrienne Nelson’s ruling comes three months after hearings where top executives and economic experts presented arguments. The injunction halts progress on the merger while the companies face ongoing challenges, including two additional lawsuits in state courts.
The FTC contends that merging two of the nation’s largest grocery chains would limit competition, potentially leading to higher prices, fewer options, and reduced wages for workers. The decision casts doubt on the future of the deal as Kroger and Albertsons continue to defend their acquisition plans.
Supermarkets have faced increasing challenges from discount chains like Aldi and e-commerce rivals like Amazon. Kroger and Albertsons, both employing mostly unionized workforces, argued that merging would help them remain competitive in a shifting market.
The outcome of these legal battles could significantly impact the grocery industry and antitrust enforcement in the United States.