Kroger has filed a counterclaim against Albertsons, arguing that its rival’s actions during their failed $24.6 billion merger violated their agreement and negated Albertsons’ right to a $600 million termination fee.
The legal battle follows Albertsons’ lawsuit in December, which accused Kroger of failing to make sufficient efforts to secure regulatory approval for the deal.
Albertsons alleged that Kroger deliberately ignored regulators’ concerns, refused to divest key assets, and rejected stronger potential buyers, ultimately leading to the merger’s collapse.
Kroger dismissed these claims as ‘baseless and without merit.’
In its counterclaim, Kroger contends that while it worked to navigate the regulatory process, Albertsons engaged in a covert effort to pursue an alternative strategy with C&S Wholesale Grocers.
The purported misconduct involved secret communications between Albertsons’ incoming CEO, Susan Morris, and C&S executives, conducted via private emails and personal phones to conceal the discussions.
Kroger asserts that Albertsons’ actions directly undermined the merger and breached their agreement.
As a result, Kroger is not only refusing to pay the termination fee but is also seeking damages to recover costs incurred while attempting to gain regulatory clearance.
The legal dispute extends to C&S, which earlier this month filed a claim demanding that Kroger pay a $125 million termination fee.
C&S had been set to acquire nearly 600 Kroger and Albertsons locations as part of the companies’ divestiture plan.
In its filing, C&S argued that Kroger had no justification for withholding payment.
Kroger has rejected C&S’s claim, stating it has no legal obligation to pay.
“It is disappointing that C&S has decided to file a baseless lawsuit when it is clear that C&S forfeited its right to a termination fee and has no reasonable claim to any damages. Kroger will vigorously defend itself,” a spokesperson told Progressive Grocer.
Meanwhile, Albertsons also named C&S in its lawsuit, claiming the company failed to account for concerns regarding the divestiture package.
The dispute over the failed merger continues to escalate as the three companies seek legal resolutions.
Click here to sign up to Retail Gazette‘s free daily email newsletter
