Albertsons has terminated its $25-billion (€23.7 billion) merger agreement with Kroger after the US District Court in Oregon and the King County Superior Court for the State of Washington blocked the deal.
"Given the recent federal and state court decisions to block our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement," Albertsons CEO Vivek Sankaran said in a statement.
The Federal Trade Commission had argued at a three-week trial in Portland, Oregon, that the merger would eliminate competition between the top two traditional grocery chains, leading to higher prices for shoppers and reduced bargaining leverage for unionised workers.
Shareholder Comment
Cerberus Capital Management, L.P. (CCM), the company’s largest shareholder added that it remains confident in Albertsons’ strength as a standalone company, and believes that it is significantly undervalued in its current trading range.
It also stated that it has no intention of selling any of its shares in the company.
Cerberus initially invested in Albertsons in 2006, with additional investments in 2013 and 2015 to support significant and strategic value creation opportunities.
Jim Donald, board chair at Albertsons, added, “This leadership team continues to transform the business and adapt to an ever-changing consumer landscape.
“The board of directors is energised by the progress made to date and is confident in the leadership team’s plans to continue driving long-term stockholder value.”
The company expects annual identical sales growth in the range of 1.8% to 2.2% and annual adjusted EBITDA in the range of $3.90 to $3.98 billion.
News by Reuters, additional reporting by ESM.
