Albertsons Makes Further Counterclaims Against Kroger
Nearly six months after their failed merger, Albertsons Cos. is pushing back against The Kroger Co. and its assertions that while it was working to seek regulatory approval and close the merger, Albertsons was engaging in a secret campaign alongside C&S Wholesale Grocers to pursue its own regulatory strategy.
Kroger filed that legal response to Albertsons’ earlier lawsuit against it in early March, which had claimed that Kroger failed to exercise “best efforts” and to take “any and all actions” to obtain regulatory approval of the companies’ proposed merger deal.
Kroger said at the time that as a result of its misconduct, Albertsons is not entitled to the $600 million termination fee under the terms of the parties' merger agreement, nor is Albertsons entitled to other damages it is seeking. The alleged misconduct included incoming Albertsons CEO Susan Morris’ “secret communications with C&S's CEO and others, utilizing personal emails and cell phones to advance Albertsons's strategy.”
In its response to Kroger’s counterclaims, filed late last week, Albertsons asserts that “No Albertsons employee participated in any surreptitious scheme to undermine the merger, much less in exchange for future employment benefits.” Albertsons also insists that the communication between Morris and C&S was known to Kroger.
Continued the company: “Ms. Morris’s selection as Albertsons’ CEO was the result of a years-long comprehensive succession planning process, from which Ms. Morris was selected among numerous other internal and external candidates.”
In its latest filing, Albertsons also stated that “Kroger’s search for a divestiture buyer was disorganized, protracted, and contributed to the ultimate failure of the merger.”
“Kroger’s counterclaims defy the plain facts of the parties’ course of dealing and are self-evidently designed to divert attention from Kroger’s own misconduct. Albertsons worked steadfastly to increase the Merger’s chance of success, even offering to contribute roughly $1-$2 per share in value to allow Kroger to enhance the divestiture package,” an Albertsons spokesperson said in a statement emailed to Progressive Grocer. “At every turn, Kroger ignored Albertsons’ input and refused to take any meaningful steps to improve its facially deficient divestiture proposals that disregarded feedback from regulators.”
Continued the spokesperson: “Instead, Kroger – under the leadership of former CEO Rodney McMullen – advanced a self-serving strategy that impaired Kroger’s credibility and doomed the prospects of a negotiated resolution with regulators. Kroger compounded these strategic errors by prioritizing its own financial interests over the selection of a divestiture package that could plausibly pass regulators’ scrutiny. We remain focused on returning value to Albertsons’ shareholders and look forward to presenting our case in court.”
In an emailed response to Progressive Grocer, a Kroger spokesperson said: “As Albertsons continues to deflect responsibility for its actions that ultimately undermined the proposed merger, Kroger is focused on delivering exceptional value to the communities we serve. We look forward to presenting our case in court where we intend to pursue our claims to the full extent of the law.”
Earlier in March, C&S Wholesale Grocers filed its own claim that Kroger should pay a $125 million termination fee. C&S had a major stake in the deal, planning to pick up nearly 600 Kroger and Albertsons stores, distribution centers and other assets as part of a divestiture plan.
Per a Wall Street Journal report, C&S argued that Kroger needs to meet the terms of an agreement. "Kroger failed to identify any reason for its refusal to pay the termination fee it owed C&S — because there is none," C&S asserted in a legal filing.
Cincinnati-based Kroger serves more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of banner names. The grocer is No. 4 on The PG 100, Progressive Grocer’s 2025 list of the top food and consumables retailers in North America. PG also named Kroger one of its Retailers of the Century.
As of Feb. 22, Albertsons Cos. operated 2,270 retail food and drug stores with 1,728 pharmacies, 405 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Boise, Idaho-based company operates stores across 34 states and the District of Columbia under more than 20 well-known banners. Albertsons is No. 9 on The PG 100 and is also named to PG's Retailers of the Century.
Keene, N.H.-based C&S is the largest grocery wholesale distributor in the United States, and the eighth-largest privately owned company. C&S also operates and supports corporate grocery stores and services independent franchisees under a chain-style model throughout the Midwest, South and Northeast. The company is No. 18 on The PG 100.
