Albertsons Seeks $9.3 Billion From Kroger Over Failed Merger

Albertsons Companies is demanding more than $9.3 billion in damages from Kroger Co. following the collapse of their proposed $24.6 billion merger, escalating a legal dispute over one of the largest grocery industry deals in U.S. history.

Attorneys representing Albertsons presented the claim Monday in Delaware Chancery Court, ahead of a two-week trial scheduled for later in October. The proceedings will determine whether Kroger violated its contractual obligations after federal regulators blocked the merger in December 2024.

Albertsons argues that Kroger deliberately breached the merger agreement by failing to make sufficient efforts to secure regulatory approval. The grocery retailer alleges that Kroger refused to revise its store divestiture strategy despite mounting antitrust concerns.

The company is seeking damages exceeding $9.3 billion, including the merger premium Albertsons shareholders would have received, a $600 million termination fee, approximately $75 million in interest, and additional expenses.

According to Albertsons, the merger agreement required Kroger to address regulatory obstacles, provided it was not forced to sell more than 650 stores.

"The bottom line is that Kroger made a promise and broke it," Albertsons said, accusing its former merger partner of failing shareholders, employees, and customers.

The proposed combination would have united Kroger, the largest traditional U.S. supermarket operator, with Albertsons, its second-largest competitor. Both companies previously argued that the merger would strengthen their ability to compete against retail giants Walmart and Amazon.

To address competition concerns, the grocers proposed selling hundreds of supermarkets to C&S Wholesale Grocers. However, a federal judge blocked the transaction in December 2024, siding with the Federal Trade Commission's argument that the divestiture proposal would not sufficiently protect competition.

Following the ruling, Albertsons abandoned the merger and sued Kroger, alleging that the company prioritized financial performance over obtaining regulatory clearance.

Kroger has rejected those allegations, maintaining that it pursued every reasonable avenue to complete the transaction. The company also accused Albertsons of secretly coordinating with C&S to influence regulators into demanding additional store sales.

C&S has denied wrongdoing, stating that its communications with the companies and regulators complied with legal, contractual, and ethical standards.

The upcoming Delaware trial could determine whether Kroger faces substantial financial liability for the failed supermarket merger.