Dec. 11 (UPI) -- Alberstons Wednesday announced a lawsuit against Kroger claiming breach of contract and alleging a failure to exercise best efforts to secure regulatory approval of a failed $24.6B merger between the companies.
The Albertsons suit seeks billions of dollars from Kroger, including a $600 million merger termination fee.
"Kroger willfully breached the Merger Agreement in several key ways, including by repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators' feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons," Alberstons said in a statement.
Kroger responded in a statement dismissing Albertsons' claims as "baseless and without merit."
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"Kroger refutes these allegations in the strongest possible terms, especially in light of Albertsons' repeated intentional material breaches and interference throughout the merger process, which we will prove in court," Kroger said.
"This is clearly an attempt to deflect responsibility following Kroger's written notification of Albertsons' multiple breaches of the agreement, and to seek payment of the merger's break fee, to which they are not entitled. Kroger looks forward to responding to these baseless claims in court."
U.S. District Court for Oregon Judge Adrienne Nelson blocked the merger Tuesday, ruling that it would likely harm consumers.
She agreed with the Federal Trade Commission, granting an FTC injunction to block the merger because it would have sifled competition.
Nelson said the antitrust concerns of federal regulators would have to be addressed before going ahead with a new merger plan.
"A successful merger between Albertsons and Kroger would have delivered meaningful benefits for America's consumers, Kroger's and Albertsons' associates, and communities across the country," Albertsons General Counsel and Chief Policy Officer Tom Moriarty said in a statement. "Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators' concerns."
Kroger countered that it went to "extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process and the facts will make that abundantly clear."
"We believe strongly in the merits of our case and look forward to presenting it to the Court to hold Kroger responsible for the harm it has caused," Moriarty's statement said.
Albertsons said it had spent multiple years and hundreds of millions of dollars to efforts to get approval for the merger.
