Kroger brings counterclaims against Albertsons

The fallout from Kroger's failed merger with Albertsons continues as Kroger has now filed counterclaims against Albertsons. 

The proposed merger, first announced back in October of 2022, was blocked in December 2024. In addition to the U.S. Federal Trade Commission, eight states challenged the $24.6 billion merger. Albertsons terminated its agreement with Kroger Dec. 11, the day after courts issued injunctions.

Albertsons filed a lawsuit against Kroger in December, bringing claims for willful breach of contract and breach of the covenant of good faith and fair dealing arising from Kroger’s failure to exercise “best efforts” and to take “any and all actions” to secure regulatory approval of the companies’ agreed merger transaction, as was required of Kroger under the terms of the merger agreement between the parties.

Albertsons is seeking billions of dollars in damages from Kroger to make it and its shareholders whole, including a $600 million termination fee.

Today's counterclaims from Kroger allege Albertsons was engaging in a secret and misguided campaign — together with C&S Wholesale Grocers, the divestiture buyer — to pursue its own regulatory strategy while Kroger was working diligently to seek regulatory approval and close the merger. Kroger said this ultimately undermined its efforts.

Kroger claims this misconduct means Albertsons is not entitled to the $600 million termination fee under the terms of the parties' merger agreement, nor is Albertsons entitled to the other damages it seeks.

“Kroger’s weak claims are a deliberate tactic to distract from its own ongoing executive leadership issues; blatant and recurring failures to carry out its contractual obligations under the merger agreement; and avoid paying the damages it owes to Albertsons," an Albertsons spokesperson told The Produce News.

"As highlighted by multiple judges in the decisions blocking the merger, Kroger — under the leadership of former CEO Rodney McMullen — acted in its own financial self-interest, proposing insufficient divestiture packages that repeatedly ignored regulators’ concerns, mismanaging the process of identifying a divestiture buyer, and failing to cooperate with Albertsons," said the spokesperson. "Kroger’s self-interested conduct doomed the merger, and we are now focused on returning value to Albertsons’ shareholders to compensate for those losses.”