Albertsons is demanding $9.3 billion from Kroger over failed merger

Albertsons filed court documents Monday demanding that Kroger pay more than $9.3 billion over the collapse of a proposed $24.6 billion merger between the two largest U.S. grocery chains, according to Bloomberg.

The filing was submitted to Delaware Chancery Court, where a two-week trial is scheduled to begin later this month. The demand includes a premium stockholders would have received if the deal had closed, a $600 million termination fee, and $75 million in interest and additional costs.

In its filing, Albertsons urges Judge Lori Will to rule that Kroger “willfully” breached the merger agreement by failing to use “best efforts” to secure regulatory approval — including refusing to alter its plan to divest certain assets. “The bottom line is that Kroger made a promise and broke it,” Albertsons said in a statement, according to Bloomberg. “Kroger should be held accountable for the harm it caused our shareholders, associates, and customers.”

In its court filing, Albertsons argued that the merger agreement bound Kroger “to remove any antitrust impediment to the merger — with no limit except that Kroger did not have to divest more than 650 stores.” Even as regulators signaled concerns and Kroger’s own lawyers and economists weighed in, Albertsons alleged that Kroger “stuck to its failing lowball strategy right through the litigation that ended the deal.”

Kroger has rejected the accusations, maintaining that it exhausted every available avenue in pursuit of regulatory approval. Kroger has also accused Albertsons of sabotaging its divestiture proposal by coordinating with C&S Wholesale Grocers — the designated buyer for divested locations — in an effort to push regulators toward requiring a larger sell-off. C&S has maintained that its communications with all parties were aimed at obtaining regulatory approval and met contractual, legal, and ethical obligations. A Kroger representative did not provide an immediate comment on Monday's filing, according to Bloomberg.

A federal judge blocked the merger in December 2024 after ruling in favor of the U.S. Federal Trade Commission, which argued the companies' plan to sell hundreds of stores to C&S was insufficient to address antitrust concerns. Albertsons subsequently terminated the deal and sued Kroger.

If Albertsons prevails, its stockholders would stand to benefit. Private equity firm Cerberus Capital Management, which held a more than 30% stake in Albertsons as of late June, is the company's largest shareholder, according to Bloomberg.

Albertsons has faced mounting financial pressure since the deal's collapse. The company cut its annual sales and profit forecasts in July after reporting a sharp drop in first-quarter earnings, sending Albertsons stock down more than 20%. Chief Executive Officer Susan Morris identified Walmart $WMT and Amazon $AMZN as the primary destinations drawing customers away from Albertsons.