Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
⏰ React to the Market Faster with Custom, Real-Time News Get Started
California, others ask court to temporarily stop $4 billion Albertsons dividend payment
© Reuters. FILE PHOTO: The Albertsons logo is seen on an Albertsons grocery store, as Kroger agrees to buy rival Albertsons in a deal to combine the two supermarket chains, in Rancho Cucamonga, California, U.S., October 14, 2022. REUTERS/Aude Guerrucci
By Diane Bartz
WASHINGTON (Reuters) - The attorneys general of California, Illinois and Washington D.C. asked a federal court on Thursday for a preliminary injunction that would prevent Albertsons Companies Inc, which is being purchased by rival Kroger (NYSE:KR) Co, from paying a $4 billion dividend to shareholders.
The state officials said in a court filing that Kroger, which does not yet own its rival, agreed with Albertsons that Albertsons would pay the dividend at the beginning of the merger review.
"Payment of the special dividend, in conjunction with the restrictions defendants' merger agreement imposes on Albertsons' ability to borrow money, likely will hamper Albertsons' ability to compete with Kroger and other grocers, leaving shoppers facing higher prices, worse service, less innovation, closure of their local Safeway or other Albertsons supermarket, or all of the above," they said in the filing.
California Attorney General Rob Bonta said in a statement that he was determined to stop the $4 billion handout. "We're not going to stop fighting to make sure that the proposed merger doesn't harm California families, workers, and farmers," he said.
Albertsons did not immediately respond to a request for comment. The company has said that it was in a strong position financially and that the dividend will not hurt it.
The lawsuit was filed in federal court in Washington, D.C.
Albertsons had been initially scheduled to pay the special dividend on Nov. 7.
A court on the other side of the country, in Washington state, has put a temporary restraining order on the payment and said it would continue to remain on hold until a hearing scheduled for Dec. 9.
Kroger snapped up Albertsons in a $25 billion deal in last month's mega merger between the No. 1 and 2 standalone grocers, saying that the deal would help it better compete against U.S. grocery industry leader Walmart (NYSE:WMT) Inc on prices. The planned acquisition has come under sharp criticism on antitrust grounds.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.