Washington decide halts $4 billion dividend by Albertsons amid Kroger merger

On Thursday, King County Superior Court docket Commissioner Henry Judson accepted a movement by state Legal professional Normal Bob Ferguson to briefly block the dividend till the courtroom can extra totally contemplate whether or not the fee violates antitrust legal guidelines, The Seattle Instances reported.

The dividend was scheduled to be paid Monday.

The proposed merger would mix two of the nation’s largest grocery chains. Some critics fear that might imply decreased competitors, increased meals costs and the closure of under-performing areas, together with some in Washington state. Albertsons, which owns Safeway, and Kroger, which owns QFC and Fred Meyer, are among the many largest gamers in Washington.

“Placing the brakes on this $4 billion fee is a large win for shoppers nationwide,” Ferguson stated Thursday afternoon on Twitter.

Subsequent Thursday, King County Superior Court docket Decide Ken Schubert is scheduled to extra intently evaluation arguments within the case.

“There may be clearly additional info and proof that must be introduced,” Judson famous.

In a lawsuit filed Tuesday, Ferguson argues the dividend is illegitimate as a result of it doubtlessly undercuts the flexibility of Albertsons to maintain all its areas open within the a number of years wanted to finish the merger.

These arguments had been echoed by attorneys common in Illinois, California and the District of Columbia, which on Wednesday collectively sued to dam the dividend in federal courtroom in Washington, D.C.

Boise, Idaho-based Albertsons stated this week that each lawsuits are with out advantage.

One main concern of the dividend is the potential affect of such a big fee on Albertsons. To win regulatory approval for the merger, Albertsons and Kroger should promote lots of of areas in areas the place they’ve an excessive amount of market overlap. So-called divestiture might have a serious affect in Seattle and all through Washington, the place Kroger and Albertsons collectively have about 350 areas.

Kroger and Albertsons have agreed to place the divested areas in a standalone firm, managed by Albertsons, after which promote them to a competing retailer or retailers as a part of the approval course of.

Nevertheless, some antitrust and enterprise consultants query whether or not areas chosen for divesture would possibly already be struggling financially. They fear {that a} cash-strapped Albertsons would possibly fail to maintain all these areas open whereas it finds a prepared purchaser and that some divested shops might shut, as occurred after the 2015 merger between Albertsons and Safeway.

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