Summarize this content to 2000 words in 6 paragraphs A federal judge on Tuesday temporarily blocked Kroger $24.6 billion acquisition of Albertsons, ruling that the proposed union would lessen competition for grocery shoppers.The preliminary injunctions issued by an Oregon court found in favor of the Federal Trade Commission, which had argued the deal would violate antitrust law.The judge’s ruling “effectively ends the likelihood of a deal taking place,” according to Neil Saunders, managing director, GlobalData. “Of all the cases the FTC has litigated over the past few years, this one was the most sensitive as it involved two huge firms supplying essential goods,” the retail analyst added.The FTC in February sued to block the proposed merger, with the agency joined in its suit by eight state attorneys general and the District of Columbia. “This historic win protects millions of Americans across the country from higher prices for essential groceries—from milk, to bread, to eggs — ultimately allowing consumers to keep more money in their pockets,” Henry Liu, Director of the agency’s Bureau of Competition, said in a statement. “This victory has a direct, tangible impact on the lives of millions of Americans who shop at Kroger or Albertsons-owned grocery stores for their everyday needs, whether that’s a Fry’s in Arizona, a Von’s in Southern California or a Jewel-Osco in Illinois.”
Companies defends dealKroger, based in Cincinnati, Ohio, operates 2,750 stores in 35 states and the District of Columbia, including brands like Ralphs, Smith’s and Harris Teeter. Albertsons, based in Boise, Idaho, operates roughly 2,300 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s. Together the companies employ around 700,000 people.The retailers agreed to join forces in October 2022, arguing the union would help them compete with Amazon, Costco, Walmart and other larger rivals. Albertsons expressed disappointment with the judge’s ruling on Tuesday pausing the deal and said the company is exploring its legal and strategic options.”We believe we clearly outlined during the proceedings how the proposed merger would expand competition, lower prices, increase associate wages, protect union jobs and enhance customers’ shopping experience,” the company said in a statement to CBS News.
Kroger also said the merger would boost grocery industry competition as well as benefit consumers and employees. Said the company in a statement:”Kroger is disappointed in the opinions issued by the U.S. District Court for the District of Oregon and the Washington State Court, which overlook the substantial evidence presented at trial showing that a merger between Kroger and Albertsons would advance the company’s decades-long commitment to lowering prices, respecting collective bargaining agreements, and is in the best interests of customers, associates and the broader competitive environment in a rapidly evolving grocery landscape.”Kroger has promised to invest $500 million to lower prices as soon as the deal closes. It said it also invested in price reductions when it merged with Harris Teeter in 2014 and Roundy’s in 2016. Kroger also pledged to invest $1.3 billion in store improvements at Albertsons as part of the deal.The FTC, which said the proposed deal would be the largest grocery merger in U.S. history, said it would also erase competition for workers, threatening their ability to win higher wages, better benefits and improved working conditions.The United Food and Commercial Workers International Union (UFCW), which represents grocery and other food industry workers, applauded the court’s decision.”We are pleased that the court heard the concerns voiced by our hard-working members and rejected the proposed megamerger between Kroger and Albertsons,” UFCW International President Marc Perrone said in a statement. “The issues we raised were echoed throughout this process by lawmakers, economists, attorneys general, consumers and the FTC.”
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Kate Gibson
Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.
