Albertsons Seeks 9 Billion Over Failed Kroger Merger

Albertsons Cos. is seeking more than $9 billion from Kroger Co. over the collapse of their planned $24.6 billion grocery merger, with the dispute moving to Delaware Chancery Court over responsibility for the failed transaction and its regulatory outcome.

Lawyers for Albertsons filed the demand Monday, asking Judge Lori Will to rule that Kroger breached the merger agreement by failing to take sufficient steps to secure approval. The two-week trial is scheduled later this month, according to the court filing.

Albertsons said Kroger should pay more than $9.3 billion, including a premium its stockholders would have received if the merger had closed, a $600 million termination fee, $75 million in interest, and additional costs.

The company argued in its filing that Kroger had agreed to address regulatory obstacles without a limit except for a restriction on divesting more than 650 stores.

Albertsons said the filing described Kroger's alleged breach using the terms "willfully" and "best efforts" when discussing the company's obligations under the merger agreement.

Albertsons argued that Kroger did not fulfill its commitments related to regulatory approval efforts and store divestitures. The companies had planned to sell hundreds of stores to C&S Wholesale Grocers Inc. as part of their approval strategy.

Albertsons Cos. said in its court filing, "Kroger willfully breached these maximalist contractual commitments. Kroger wanted the Merger but only on its own terms."

The proposed combination of Kroger, the largest US grocery chain, and Albertsons, the second-largest, was blocked by a federal court in December 2024 after the US Federal Trade Commission challenged the deal's divestiture plan.

Albertsons Cos. said, "The bottom line is that Kroger made a promise and broke it."

Albertsons said the lawsuit seeks accountability for the effects of the failed transaction on shareholders, employees, and customers. Its largest shareholder was private equity firm Cerberus Capital Management, which held more than 30% of the company at the end of June.

Albertsons Cos. said, "Kroger should be held accountable for the harm it caused our shareholders, associates, and customers – and we look forward to proving our case in court."

Kroger did not immediately provide a comment on Albertsons' filing. The companies' merger would have created the largest US grocery chain and was intended to strengthen competition with major rivals including Amazon.com Inc. and Walmart Inc.