The proposed deal to merge rival supermarket chains Albertsons and Kroger has been shut down by two U.S. courts earlier this week. However, the saga won’t end there as Albertsons is now demanding “billions of dollars” from Kroger due to a breach of contract.
Albertsons and Kroger have initially announced a tie-up worth $25 billion in 2022. The deal would create one of the largest retailers in the nation. However, U.S. District Judge Adrienne Nelson opted to block the merger, ruling on Tuesday that it would eliminate competition between Albertsons and Kroger and lead to higher prices for consumers. Judge Marshall Ferguson from King County Superior Court in Washington later made a similar decision.
Now, Albertsons confirmed that the company “made the difficult decision to terminate the merger agreement.” It is also filing a lawsuit against Kroger and “seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole.” According to the lawsuit, Kroger failed to make its “best efforts” and take “any and all actions” to secure regulatory approval for the deal.
On top of “billions of dollars in damages,” Albertsons is also demanding a break-up fee of $600 million.
Kroger, on the other hand, called Albertsons’ claims “baseless and without merit” and said it would respond to them in court. The retailer also stated that Albertsons isn’t entitled to a break-up fee.
“We went to extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process,” Kroger added.