Albertsons Seeks More Than $9 Billion Over Busted Kroger Deal

(Bloomberg) -- Albertsons Cos. is demanding that Kroger Co. pay more than $9 billion for the collapse of what would have been the largest US grocery chain merger in history.

Lawyers for Albertsons made the demand Monday in Delaware Chancery Court, where a two-week trial is slated later this month in a legal fight over who is to blame for the failure of the $24.6 billion deal. The plan to combine the two largest US grocery chains was blocked by a federal court in December 2024.

Albertsons wants Judge Lori Will to find that Kroger "willfully" breached the merger agreement by failing to use "best efforts" to get regulatory approval, including a refusal to alter its plan to divest certain assets. Kroger should pay more than $9.3 billion, which includes a premium stockholders would have gotten if the deal had closed, and a $600 million termination fee plus $75 million in interest and additional costs, Albertsons said.

Under the terms of the agreement, Kroger had agreed "to remove any antitrust impediment to the merger — with no limit except that Kroger did not have to divest more than 650 stores," Albertsons said in the court filing. "Kroger willfully breached these maximalist contractual commitments. Kroger wanted the Merger but only on its own terms."

A Kroger representatives didn't provide an immediate comment on the Albertsons filing.

"The bottom line is that Kroger made a promise and broke it," Albertsons said in a statement. "Kroger should be held accountable for the harm it caused our shareholders, associates, and customers – and we look forward to proving our case in court."

If Albertsons wins its case, its stockholders would benefit. The publicly-listed company counts private equity firm Cerberus Capital Management as its largest shareholder, with a more than 30% stake at the end of June.

The merger would have seen Kroger, the largest US grocery chain, acquire the No. 2 grocer, Albertsons, with the aim of boosting competition against Amazon.com Inc., Walmart Inc. and other non-unionized rivals.

To win regulatory approval, the companies agreed to sell hundreds of stores to C&S Wholesale Grocers Inc. But a federal judge in December 2024 blocked the deal after ruling in favor of the US Federal Trade Commission, which argued the divestiture plan was insufficient to address antitrust concerns.