The Federal Trade Commission (FTC) has objected to Kroger's acquisition of Albertsons and Kroger, and now the two stores have offered a new compromise to quell concerns over approval of the merger.
The two grocery store chains have agreed to sell an additional 166 stores to C&S Wholesale Grocers, which owns 24 Piggly Wiggly and Grand Union supermarkets, in a deal valued at an estimated $2.9 billion. did. The total number of stores sold to this retailer now stands at 579 stores.
Kroger CEO Rodney McMullen said in a company release that the additional grocery stores being sold to C&S will result in store closures, job losses, and changes to employee benefits even after the merger closes. He said it is guaranteed that there will be no.
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“Our proposed merger with Albertsons will bring lower prices and more choice to more customers and secure the long-term future of jobs at unionized grocery stores.” he said.
The merger, announced in 2022 and worth an estimated $25 billion, is under FTC oversight. The agency argues that new integrated chains will limit competition and have dire consequences for employees, customers and food providers generally, from unfair prices to lower wages for employees.
The FTC originally filed suit in February seeking to block the merger, with eight states and Washington, D.C. also joining.
“This supermarket megamerger comes at a time when U.S. consumers have seen steadily rising grocery prices over the past few years. “This would lead to further price increases and exacerbate the economic burden currently facing consumers across the United States,” Henry Liu, director of the FTC's Bureau of Competition, said earlier this year. “Essential grocery store workers will also suffer under this agreement, facing the threat of lower wages, fewer benefits, and worse working conditions.”
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In addition, Kroger has agreed to sell the Hagen name to C&S, which will operate the Albertsons name in California and Wyoming and the Safeway name in Arizona and Colorado.
The FTC has not yet commented on whether the amended sale agreement will affect its decision to allow the merger to proceed.
