By Mike Scarcella
(Reuters) - The U.S. Federal Trade Commission said on Monday that it is suing to block Kroger (NYSE:KR)'s $24.6 billion purchase of rival grocery chain Albertsons (NYSE:ACI) on antitrust grounds, adding to a slew of legal challenges from U.S. states and consumers.
Here is a look at some of the ongoing cases.
EIGHT STATES AND D.C. JOIN FTC LAWSUIT
The FTC on Monday said Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming are joining its new federal case.
The agency said it would ask an Oregon federal judge for a temporary restraining order and preliminary injunction to block the merger, which it said would drive up grocery costs, erode product quality and restrict worker pay.
The companies have previously denied that the deal would harm competition. Kroger in a statement on Monday said the lawsuit "will actually harm the very people the FTC purports to serve: America's consumers and workers." Albertsons in a statement said the merger "will ensure our neighborhood supermarkets can better compete" with "mega-retailers" such as Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and Costco (NASDAQ:COST).
California Attorney General Rob Bonta has said the Kroger-Albertsons deal could create "pharmacy deserts" where it would be harder for people in poorer parts of cities or rural areas to buy medicines.
WASHINGTON STATE FIRST TO SUE
Washington Attorney General Bob Ferguson sued to stop the deal in January, telling a state judge in Seattle that Washington would be among the “most impacted” if Kroger is allowed to purchase Albertsons.
The deal between the two largest grocers the state, first announced in October 2022, would hurt competition and increase prices, the lawsuit said.
Kroger previously had said it would sell 413 stores to C&S Wholesale Grocers as part of a divestiture plan to alleviate antitrust concerns. Upwards of 100 of those stores are in Washington state, more than any other state.
Ferguson’s office in 2023 unsuccessfully tried to stop Albertsons from making a $4 billion dividend payment to shareholders before closing the deal with Kroger.
COLORADO'S LAWSUIT ADDS LABOR ANTITRUST CLAIM
Earlier this month Colorado Attorney General Philip Weiser also sued to stop the Kroger-Albertsons deal.
Like Washington state and the FTC, Colorado claims the deal would restrict competition and concentrate too much market power in the merged company. The cases contend the merger will lead to closed stores, higher prices and reduced jobs.
Weiser’s lawsuit also said Kroger and Albertsons entered into no-poach and non-solicitation agreements in 2022 that unlawfully restricted employee mobility.
CONSUMER CASE FALTERS
Kroger and Albertsons have also been fighting a private consumer lawsuit in California federal court seeking to block the deal.
A U.S. judge in San Francisco has twice agreed to dismiss the lawsuit, ruling in December that the consumers did not show how they would be harmed by the merger. The case is ongoing after the judge said the plaintiffs could again amend their complaint.