A judge has granted preliminary injunction to stop the planned merger between Kroger and Albertsons grocery stores.
U.S. District Judge Adrienne Nelson of Oregon and Washington ruled in favor of the Federal Trade Commission’s decision to stop the proposed $24.6 billion merger.
“There is ample evidence that the divestiture is not sufficient in scale to adequately compete with the merged firm and is structured in a way that will significantly disadvantage C&S as a competitor. C&S’ history of unsuccessful grocery store ventures and its continuing dependence on defendants throughout the TSA period also suggest that the divestiture will not adequately restore competition,” Nelson wrote in her ruling. “The deficiencies in the divestiture scope and structure create a risk that some or all of the divested stores will lose sales or close, as has happened in past C&S acquisitions.”
Judge Nelson, who was appointed by President Joe Biden, said the two grocers’ claim that they would not be able to compete against Costco, Walmart, and Amazon unless they merged didn’t sway her.
“The overarching goals of antitrust law are not met, however, by permitting an otherwise unlawful merger in order to permit firms to compete with an industry giant,” Nelson said.
The FTC applauded the decision, calling it a win for union employees.
“The FTC, along with our state partners, scored a major victory for the American people, successfully blocking Kroger’s acquisition of Albertsons. This is also a victory for thousands of hardworking union employees, protecting their hard-earned paychecks by ensuring Kroger and Albertsons continue to compete for workers through higher wages, better benefits, and improved working conditions,” the FTC said, identifying the main reason that the FTC is opposing the merger — unions oppose it.
Kroger said in a statement, ““Kroger is disappointed in the opinions issued by the U.S. District Court for the District of Oregon and the Washington State Court, which overlook the substantial evidence presented at trial showing that a merger between Kroger and Albertsons would advance the company’s decades-long commitment to lowering prices.”
Judge Nelson, considered a partisan Democrat by many, was originally appointed to the Oregon Supreme Court by Democrat Gov. Kate Brown of Oregon. She was nominated by Biden and confirmed to the federal court by nearly a party-line vote in 2023, with Sen. Lisa Murkowski crossing over to vote in favor, and Sen. Dan Sullivan voting against.
