Albertsons Cos. is set to open a two-week trial against Kroger Co. on Monday in Delaware Chancery Court, seeking more than $9.3 billion over the collapse of their $24.6 billion merger, according to Bloomberg.
Judge Lori Will must determine if Kroger knowingly breached the merger agreement. The case is a bench trial, meaning the judge alone decides it, and decisions frequently come months later, with any appeal going to the Delaware Supreme Court, according to Reuters.
Albertsons' demand for damages covers a $600 million termination fee along with interest and costs, and it also seeks over $8 billion to reflect the premium stockholders would have received from the deal, plus taxes on those gains, according to Bloomberg.
Albertsons claims Kroger refused to offer enough stores and other assets for divestiture to win regulatory clearance, choosing instead to concentrate on its own internal profit goals. Albertsons also said Kroger set up an executive bonus pool worth $400 million meant to motivate managers to push hard against regulators, according to Reuters.
Kroger says it made every possible effort, putting more than $1 billion into pursuing the deal and fighting for it in court. It argues the merger would not have won approval under then-FTC Chairwoman Lina Khan, according to Bloomberg.
Kroger also says Albertsons is not entitled to the fee, since Albertsons weakened Kroger's position before regulators by communicating secretly with C&S Wholesale Grocers. Kroger blamed part of that on unauthorized communications by Susan Morris, now Albertsons' CEO. Albertsons countered that nothing indicates Morris passed along any confidential details, according to Reuters.
Albertsons is expected to start its case with testimony from Vivek Sankaran, who previously led the company, according to Bloomberg. Ted Hassi, an outside attorney who counseled Albertsons on antitrust issues, and Tom Moriarty, the company's general counsel and head of mergers and acquisitions, will also take the stand.
Other witnesses called during the first days of the trial include former Kroger CEO Rodney McMullen and Michael Bernstein, a lawyer with Arnold & Porter who counseled Kroger on antitrust matters, according to Bloomberg.
Albertsons demanded more than $9.3 billion in a court filing last week, asking Will to find that Kroger willfully breached the merger agreement. "The bottom line is that Kroger made a promise and broke it," Albertsons said in a statement.
A federal judge blocked the merger in December 2024, agreeing with the Federal Trade Commission that a proposal to divest hundreds of locations to C&S did not go far enough. Albertsons then called off the agreement and filed suit against Kroger.
The merger agreement limited Kroger to selling 650 stores. Kroger says regulators were seeking the divestiture of a larger number of stores than that, according to Reuters.