Shares of Kroger Co. experienced their most significant surge in two years on Thursday following the grocery chain's announcement of quarterly profits exceeding expectations. Despite regulatory pushback, Kroger reiterated its commitment to the proposed USD 24.6 billion acquisition of Albertsons Companies Inc (Safeways, VCons, Jewel-Osco).
The U.S. Federal Trade Commission (FTC) last week filed a lawsuit aiming to block what would be the largest supermarket merger in U.S. history. The FTC argues that the merger would diminish competition, drive up grocery prices, and adversely impact workers.
Henry Liu, Director of the FTC’s Bureau of Competition, stated, "Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today." Several states have joined the FTC's lawsuit, alleging that the deal is anticompetitive.
In response, Kroger's Chief Executive Rodney McMullen expressed disappointment in the FTC's challenge but affirmed that the company's focus remains on benefiting customers and employees. McMullen highlighted Kroger's track record in previous mergers, emphasizing a commitment to lower prices, invest in employees, and enhance the customer experience.
McMullen asserted, "The character of a company is clear in its actions, regardless of what others claim." He emphasized confidence in the merger's potential to secure future union jobs.
Kroger's merger announcement with Albertson Companies Inc. in October 2022 (inside.beer, 14.10.2022) aimed to strengthen its position as the second-largest food retailer in the U.S. According to GlobalData, the combined entity would hold an estimated market share of 11.8%, second only to Walmart at 17.1%.
