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Kroger And Albertsons Plan Merger To Combine 2 Largest Supermarket Chains

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Kroger And Albertsons Plan Merger To Combine 2 Largest Supermarket Chains

(CTN News) – According to the companies on Friday, Kroger will acquire Albertsons for $24.6 billion, combining the two largest grocery chains in the country.

As a new supermarket colossus forms at a time of skyrocketing food prices, the deal might draw intense scrutiny from regulators and critics. In September, grocery prices rose 13% from a year ago.

Kroger has 420,000 employees and 2,700 stores, including Ralphs, Harris Teeter, Fred Meyer, and King Soopers. The company has almost 2,300 stores, including Safeway and Vons, and 290,000 employees.

Both have overlap in several markets, mostly in the west. In their deal, up to 375 stores would be spun off into a separate company.

Kroger said it would “reinvest approximately half a billion dollars of cost saving from synergies to lower prices for customers” and invest $1 billion to raise wages and benefits.

As a nationwide big-box giant, Walmart sells more groceries than Kroger and Albertsons combined. Amazon, with its online delivery reach, as well as Costco and dollar stores, the fastest-growing segment of U.S. retail, also compete with them.

In the Biden administration, antitrust regulators pushed back against megadeals, citing their outsized impact on competition and prices.

Former FTC chair William Kovacic says Kroger and Albertsons will get a closer look than earlier deals in this sector. “They’re going to face a lot more skepticism about the benefits of consolidation,”

However, the federal competition regulators have also lost lawsuits trying to block mergers, Kovacic said.

There’s going to be a tough time going through the FTC’s review,” he said. “That doesn’t mean the FTC will win in court if it decides to challenge the deal.”

For many years, Kroger, Albertsons, and Safeway were the leading standalone grocery chains. In 2015, Albertsons bought Safeway, then tried to merge with Rite Aid in 2018, and went public in 2020.

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