The Federal Trade Commission is talking to companies that sell groceries across the country about their views on the potential acquisition of Albertsons by Kroger, the Wall Street Journal reported.
The WSJ cited “people familiar with the matter,” and said the government trade regulator is asking grocery retailers and wholesalers about the food sales landscape. Questions include their individual business models, who they see as competition, and even “their view of the proposed Albertsons-Kroger deal.”
The FTC would have to give the deal a thumbs up to move forward. Kroger officials have expressed confidence they can get the deal through the regulatory process, and signaled they were willing to sell or spin off 250-300 stores to make it happen.
The government has increasingly taken a more muscular approach to competition and mergers – first under the Trump administration, and now during the Biden administration.
Mergers & acquisitions at all levels of government review have run into issues in the last few years. The FTC sued to stop Microsoft from buying Activision-Blizzard earlier this year, a deal to merge book publishers Penguin Random House and Simon & Shuster fell apart after government scrutiny, and a hedge fund-backed deal to buy TV station owner Tegna is under pressure by judicial action from the Federal Communications Commission.
The WSJ said FTC officials are probing a wide array of issues that could be key in the Kroger/Albertsons deal. Questions include product sourcing and pricing, the details of online operations, and more. The agency also is trying to understand how shopper data is used, how the “own brands” programs in Albertons & Kroger work, the inner workings of pharmacies, and even “store labor dynamics.”
Albertsons and Kroger officials have said the $25 billion deal will help them better compete with large companies like Walmart and Amazon, and will help boost access to fresh foods, along with other benefits.
The deal would involve nearly 5,000 stores under about two dozen brands, including Kroger’s Fred Meyer, which operates in the Boise area. Kroger hopes to get the deal done by early 2024.
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The FTC said the deal first announced in October 2022 would eliminate fierce competition between Kroger and Albertsons. But Kroger has defended its business model, saying it has reduced prices every year since 2003 and that strategy would be applied to the merged company.
Case Summary. The Federal Trade Commission sued to block the largest proposed supermarket merger in U.S. history—Kroger Company's $24.6 billion acquisition of the Albertsons Companies, Inc. —alleging that the deal is anticompetitive.
The district attorneys in Ventura and Santa Barbara counties announced a civil case on Friday alleging Kroger violated California's false advertising and unfair competition laws from late 2018 until at least June 2022.
The FTC alleged that the merger of Kroger and Albertsons would substantially lessen competition in supermarkets, resulting in higher grocery prices, lower quality of goods and services, and fewer choices for consumers.
“A merger of Kroger and Albertsons would dramatically decrease competition within an already consolidated food retail market, which would result in fewer grocery stores and higher food prices, with predictable adverse consequences for food and nutrition security for consumers across the country,” Peter Lurie, president ...
Hedge funds don't have many shares in Kroger. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 11%. For context, the second largest shareholder holds about 7.9% of the shares outstanding, followed by an ownership of 6.9% by the third-largest shareholder.
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It had nearly double the retail sales of the next chain, Albertsons. Founded in 1883 in Cincinnati, Ohio (where it is still headquartered), by Bernard Kroger, The Kroger Co. has become the largest supermarket chain in the United States and the one of the largest overall retailers, behind the retailing giant, Walmart.
Grocery powerhouses Albertsons, which owns Jewel-Osco, and Kroger, which owns Mariano's, had hoped to complete a nationwide merger by early this year, but the Federal Trade Commission has slowed the roll with a lawsuit — saying the nearly $25 billion deal will kill competition and raise grocery prices for millions of ...
Subject to fulfillment of customary closing conditions, including Federal Trade Commission and/or other governmental clearance, and the completion of the Kroger-Albertsons merger, C&S will pay Kroger an all-cash consideration of approximately $2.9 billion, including customary adjustments.
The grocery store industry has undergone considerable changes in recent years with the entry and massive growth of Walmart, Costco and Amazon. The Kroger-Albertsons merger would create the potential for the combined firm to lower both its distribution costs and the prices it pays wholesalers to acquire its products.
The lawsuit, pending in U.S. District Court in Cincinnati, claims Kroger used the assistant managers to save money on payroll costs. “(Kroger) knew or recklessly disregarded the fact that their underfunding of store labor budgets resulted in (assistant store managers) … working more than forty (40) hours ...
The FTC enforces federal consumer protection laws that prevent fraud, deception and unfair business practices. The Commission also enforces federal antitrust laws that prohibit anticompetitive mergers and other business practices that could lead to higher prices, fewer choices, or less innovation.
The contract raises starting wages to $13 per hour and provides wage increases up to $2.50 per hour for associates and department leaders along with an increase for those working night shifts. The grocery chain's original offer was rejected by union workers due to issues with wages and health care.
The FTC enforces consumer protection laws to stop illegal business practices and get refunds to people who lost money. The chart below includes all active refund programs managed by the FTC. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize.
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