Key Takeaways
- Kroger asked a federal court for an injunction to stop a Federal Trade Commission (FTC) proceeding to block the grocery chain’s $24.6 billion acquisition of Albertsons.
- The FTC moved this year to prevent the sale, arguing it would limit competition and raise food prices.
- Kroger also announced it would offer bonds to pay for part of the cash considerations in the deal.
Kroger (KR) shares declined in intraday trading Tuesday as the biggest U.S. supermarket chain launched a two-part effort to finally end its long-running battle to purchase rival Albertsons (ACI).
Kroger said it has asked the federal court in the Southern District of Ohio for an injunction against the Federal Trade Commission’s (FTC) administrative proceeding aimed at blocking the deal from going through. The company argued that the proceeding violates the Constitution as it is being held along with the FTC’s court action against the merger.
At the same time, Kroger filed a Preliminary Prospectus Supplement with the Securities and Exchange Commission (SEC) to sell an undetermined amount of bonds to come due between 2026 and 2064. The company explained that the proceeds from the offering would be used “to pay a portion of the cash consideration for the Merger.”
FTC Has Claimed Kroger-Albertsons Combination Would Limit Competition
Kroger’s planned $24.6 billion acquisition of Albertsons was announced in 2022, but the FTC moved last February to stop it, claiming the combination would limit competition and increase food prices. The companies have denied that, and have been selling off stores in order to get regulatory approval.
Shares of Kroger were down almost 2% at $51.79 as of 2 p.m. ET Thursday but are up about 13% for 2024. Albertsons shares, which slipped less than 1% to $20.74, are 9% lower year-to-date.