Kroger Fights Suit by Albertsons Over Failed Deal

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Kroger Co. is fighting back against a lawsuit brought by Albertsons Cos. over its failed $24.6 billion takeover of the rival grocery chain, escalating a dispute that began after U.S. antitrust enforcers succeeded in blocking the deal last year.

Albertsons is trying to extract billions of dollars, including a $600 million termination fee, with baseless claims that Kroger tried to undermine the deal, attorneys for Kroger wrote in a filing that was unsealed on March 25 in the Delaware Court of Chancery.

According to Kroger, private equity firm Cerberus Capital Management, the biggest shareholder in Albertsons, was incentivized to push the lawsuit to give “Albertsons the cash it desperately needed to survive, and Cerberus the opportunity to realize a sufficient return on its decades-long investment.”

Kroger is seeking damages from Albertsons for the money it spent trying to obtain regulatory approval. The amount wasn’t disclosed in the filing.

An Albertsons supermarket in Upland, Calif. (Kyle Grillot/Bloomberg News)

An Albertsons spokesman said March 25 that Kroger’s “weak claims” are a tactic to distract from Kroger’s failures to carry out its contractual obligations under the deal agreement, avoid paying the damages it owes and its ongoing executive leadership issues. Albertsons was committed to the success of the combination, but Kroger did not hold up its end of the bargain, the spokesman said, adding that the company looks forward to presenting its case in court.

Kroger and Albertsons rank Nos. 26 and 42, respectively, on the Transport Topics Top 100 list of the largest private carriers in North America, and Kroger, Albertsons and C&S rank Nos. 3, 5 and 9, respectively, on the TT grocery carriers list.

Kroger agreed two years ago to acquire Albertsons, with the goal