Business Community

Albertsons backs out of merger with Kroger, which would have forced sale of two local stores

A merger that would have forced the sale of two Gig Harbor grocery stores imploded this week, when Albertsons backed out of its agreement with Kroger.

Albertsons, which owns Safeway, also filed a lawsuit against Kroger, which owns Fred Meyer, early on Wednesday, Dec. 11. Those moves came a day after two judges separately blocked the merger.

The merger, first proposed in 2022, would have led to the sale of the Gig Harbor Albertsons and Safeway stores to C&S Wholesale Grocers. The local stores were among nearly 600 nationwide that Kroger-Albertsons proposed to sell to comply with antitrust laws.

The proposed Kroger-Albertsons merger, which would have forced the sale of the Gig Harbor Safeway and Albertsons stores, appears to be off.

The two court rulings on Tuesday indicate that the store sell-off didn’t go far enough. In separate lawsuits, a King County Superior Court judge in Seattle and a federal judge in Oregon temporarily blocked the merger.

The federal judge ruled that the merger would lead to undue market concentration, while the King County judge said it violated state antitrust laws.

The companies can appeal those rulings, but Albertsons’ move on Wednesday indicates they may choose not to.

Albertsons announced in a news release Wednesday that it terminated its agreement with Kroger and filed a lawsuit against its former partner. The lawsuit alleges that Kroger didn’t do enough to win regulatory approval.

The news release says Albertsons seeks “billions of dollars in damages from Kroger to make Albertsons and its shareholders whole.”