December 3, 2022

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Krueger and Albertson announce plan to combine in $25 billion deal

Krueger and Albertson announce plan to combine in $25 billion deal

He added, “Abstracting is always a great idea for fusing parties, and it’s not always a very good idea for consumers.”

Albertsons shares fell on Friday, a sign that investors are skeptical that the deal will bypass regulators. By late morning, the stock was trading at less than $27 per share, below Kroger’s $34.10 share offer price.

When announcing the deal, Kroger also sought to allay concerns about the impact on consumers by saying it expects to save about $500 million in costs, which it plans to use to “lower prices for customers.” The main focus of regulators will likely be on whether or not he will follow these plans.

Although cost savings in acquisitions often come from layoffs, grocery sellers may also refer to the fact that their workforce is affiliated with unions as part of their discussions with regulators. Biden administration He was a great champion of unions. Neither Walmart nor Amazon has been widely standardized.

Consumer groups raised concerns about the deal after reports of a possible merger on Thursday. The American Economic Freedoms Project, a nonprofit organization that promotes antitrust legislation, criticized it as a “bad deal for consumers, workers, and communities.”

“There is no reason to allow the merging of two of the nation’s largest supermarket chains – especially with food prices already soaring,” Sarah Miller, the group’s executive director, said in a statement Thursday.

As part of their presentation to regulators, Krueger and Albertson will likely try to convince them that their scale is necessary to compete against big box stores such as Aldi and Lidl — two European chains that are rapidly expanding in the United States — and Costco, such as Amazon, as well.

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However, the agency did not always allow retailers to use Amazon as a bogeyman to help liquidate their deals. in 2015The Federal Trade Commission (FTC) successfully sued to block a merger between retailers Office Depot and Staples, even after they framed the deal as an attempt to take over Amazon and drive down prices.