The Federal Trade Commission (FTC) is challenging Kroger’s acquisition of Albertsons and Kroger, and now the two stores have offered another compromise to curb concerns about approving the merger.
Now, the two grocery chains have agreed to sell another 166 stores to C&S Wholesale Grocers (which owns 24 Piggly Wiggly and Grand Union supermarkets) in a divestiture deal worth an estimated $2.9 billion. The retailer’s total number of stores sold is now 579.
The additional grocery stores sold to C&S will ensure that no stores close, no employees lose their jobs and no employee benefits change once the merger is completed, Kroger CEO Rodney McMullen said in a company statement.
Related: FTC sues to block $25 billion grocery merger between Kroger and Albertsons
“Our proposed merger with Albertsons will bring lower prices and more choices to more customers and secure the long-term future of unionized jobs in the grocery industry,” he said.
The merger, announced in 2022 and worth an estimated $25 billion, is under scrutiny by the FTC. The agency argues that the new combined chain would limit competition and have disastrous implications for employees, customers and food suppliers overall, from unfair pricing to reduced employee wages and more.
The FTC initially sued to block the merger in February and was joined by eight states and Washington, DC
“This supermarket mega-merger comes as American consumers have seen the cost of groceries rise steadily in recent years. Kroger’s acquisition of Albertsons would lead to further increases in grocery prices for everyday goods, further exacerbating the financial strain consumers across the country face today,” Henry Liu, director of the FTC’s Bureau of Competition, said earlier this year. “Essential grocery store workers would also suffer under this deal, facing the threat of decreased wages, decreased benefits, and deterioration of their working conditions.”
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Additionally, Kroger has now agreed to sell the Haggen name to C&S, while C&S 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 or not the revised divestiture agreement would affect its decision to allow the merger.