The Kroger Co. (NYSE: KR) and Albertsons Companies Inc. (NYSE: ACI) are pausing their proposed $24.6 billion merger as federal and state lawsuits seek to block their union.
The Wall Street Journal reports the supermarket giants agreed to a temporary injunction in a state lawsuit filed by Colorado Attorney General Phil Weiser. The companies announced their planned merger last October, which could have created a combined company with more than 4,000 stores. In February, the companies were hit with a lawsuit filed by the Federal Trade Commission (FTC), which claimed the merger would result in higher food prices while diminishing the power by workers to bargain for pay raises. Eight states and the District of Columbia also sued to stop the deal.
In April, the companies said they would divest an additional 166 supermarkets to gain regulatory approval. The FTC was not receptive to the proposal and a district court hearing has been scheduled for Aug. 26 on the regulator’s bid for a preliminary injunction to block the merger. However, the judge in the FTC’s case could issue an order before the Colorado state trial starts on Sept. 30.
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