The Federal Trade Commission (FTC) is questioning Kroger’s acquisition of Albertsons and Kroger, and now the two stores have offered another compromise to curb concerns about the merger’s approval.
Now the two grocery chains have agreed to sell an additional 166 stores to C&S Wholesale Grocers (which owns 24 Piggly Wiggly and Grand Union supermarkets). The divestiture agreement is said to have an estimated value of $2.9 billion. The total number of stores sold to the retailer is now 579.
The additional grocery stores sold to C&S will ensure that no stores will close, no employees will lose their jobs and no employee benefits will change after the merger closes, Kroger CEO Rodney McMullen said in a company statement.
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“Our proposed merger with Albertsons will bring lower prices and more choice to more customers and secure the long-term future of union jobs in the grocery retail sector,” he said.
The merger, announced in 2022 and valued at an estimated $25 billion, is under review by the FTC. The agency claims the new combined chain would limit competition and have a catastrophic impact on employees, customers and food providers overall, from unfair prices to lower employee wages and more.
The FTC originally sued in February to block the merger and was joined by eight states and Washington, DC
“This mega-merger of supermarkets comes at a time when food prices for American consumers have been steadily rising in recent years. Kroger’s acquisition of Albertsons would lead to further increases in grocery prices for everyday goods, further exacerbating the financial burden facing consumers across the country today,” said Henry Liu, director of the FTC’s Bureau of Competition, Beginning of the year. “Grocery store workers would also suffer from this deal, as they risk seeing their wages reduced, their benefits reduced and their working conditions worsened.”
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Additionally, Kroger has now agreed to sell the Haggen name to C&S, while C&S will operate the Albertsons name in California and Wyoming and the Safeway name in Arizona and Colorado.
The FTC has not yet commented on whether the revised divestiture agreement would impact its decision to proceed with the merger.