Grocery chain Albertsons has abandoned a proposed $25B merger with Kroger and is now suing its rival for alleged breach of contract. The termination ends a two-year effort to combine the competitors into the largest supermarket in US history, which would have controlled roughly 13% of the grocery market.
Albertsons seeks a $600M termination fee and additional damages for legal expenses as well as lost shareholder value. Albertsons alleges Kroger failed to make sufficient efforts to secure regulatory approval for the merger, including refusing to divest enough assets and ignoring regulators' feedback. Kroger denied the claims, contending Albertsons isn't entitled to the termination fee because Kroger fulfilled its end of the agreement.
The move comes a day after federal and state courts halted the deal, citing concerns about reduced competition and higher consumer prices. A third judgment is pending in Colorado. The merger had faced opposition from nine state attorneys general and the Federal Trade Commission.
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