In the latest twist in the ongoing legal battle between two of America's largest grocery chains, Kroger has countersued Albertsons, alleging that Albertsons secretly planned its lawsuit before their $25 billion merger deal fell apart.
The lawsuit, filed on Tuesday, marks a major escalation in the dispute that began after federal and state regulators blocked the merger in late 2024.
Kroger claims that Albertsons was working behind the scenes with C&S Wholesale Grocers to push its own regulatory strategy while failing to uphold its obligations under the merger agreement.
The supermarket giant argues that instead of working toward completing the deal, Albertsons was focused on legal action long before the merger was officially terminated.
The controversy surfaced during antitrust hearings when Susan Morris, Albertsons' recently promoted CEO designate, was questioned by government lawyers.
Kroger alleges that her testimony revealed how Albertsons collaborated with C&S Wholesale to increase pressure on Kroger, including pushing for more divestitures than originally planned.
According to USA Today, Albertsons terminated the merger in December 2024 and quickly sued Kroger for breach of contract, demanding billions in damages and a $600 million termination fee.
Kroger, however, has dismissed these claims as baseless, arguing that Albertsons' actions disqualify it from receiving any termination fees or additional damages.
"Albertsons' misconduct shockingly came to light in the middle of the antitrust trials," Kroger stated in its counterclaim. "Instead of working to complete the merger, Albertsons secretly plotted its legal battle in advance."
Kroger has accused Albertsons of undermining their $20 billion merger by working with C&S Wholesale Grocers to inflate the number of stores that needed to be divested. Kroger claims Albertsons secretly pushed a regulatory strategy to pressure Kroger into providing stores to C&S… pic.twitter.com/FvfMlRFy8Z
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Kroger Alleges Albertsons Used Private Emails to Influence Deal
In response, Albertsons has defended its position, stating that it remained committed to the merger from the beginning.
"Kroger's weak claims are a deliberate tactic to distract from its own ongoing executive leadership issues and its failure to fulfill contractual obligations," Albertsons said in an emailed statement to Reuters.
The merger agreement originally required Kroger and Albertsons to divest hundreds of stores to C&S Wholesale Grocers in order to ease regulatory concerns.
However, Kroger now alleges that Albertsons used personal emails and private communications with C&S to exert pressure for additional divestitures, ultimately making regulatory approval more difficult.
The legal battle comes at a time of leadership changes for both companies. In early March, Kroger CEO Rodney McMullen resigned after an internal investigation found his conduct inconsistent with company policies.
Meanwhile, Albertsons announced that its CEO Vivek Sankaran would retire, with Susan Morris set to take over.
Kroger is seeking damages from Albertsons to recover the significant investments it made in attempting to secure regulatory approval for the merger.
As the case moves forward, both companies remain firm in their positions. "We look forward to presenting our case in court," Albertsons stated, signaling that this legal dispute is far from over.
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