Kroger Files Counterclaims Against Albertsons, Seeks Damages

On Tuesday, The Kroger Company (NYSE:KR) announced it has submitted its official response and counterclaims in the Delaware Court of Chancery regarding the lawsuit filed by Albertsons Companies Inc (NYSE:ACI), which relates to the termination of their merger agreement in December 2024.

In its counterclaims, Kroger accused Albertsons of acting in bad faith by damaging Kroger’s efforts to obtain regulatory approval for the merger.

Kroger alleged that Albertsons secretly collaborated with C&S Wholesale Grocers, the designated buyer for divestitures, to pursue its own agenda.

The filing highlighted evidence uncovered during antitrust trials, which include private communications between Albertsons’ executives, such as CEO-designate Susan Morris, and C&S’s leadership.

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Kroger said these actions contributed to the merger's failure, as regulators were misled into believing C&S was an unsuitable divestiture buyer.

Kroger further claimed that Albertsons executives contradicted their earlier testimony in antitrust hearings.

These actions form the basis of Kroger's argument that Albertsons is not entitled to the $600 million termination fee outlined in their agreement, nor any other damages.

Kroger is also using the counterclaims to seek compensation for the resources invested in the merger process.

The filing also stated that Albertsons devised a “Plan B” to initiate a legal dispute if the merger fell through, complete with falsified evidence.

This plan reportedly contained baseless accusations from Albertsons executives, which contradicted their sworn statements in court. Kroger argued that Albertsons had already pivoted to litigation long before the merger's failure, indicating that the company had abandoned its commitment to completing the deal.

Last year, Albertsons terminated its planned merger with Kroger and initiated legal action against the supermarket giant. The lawsuit professed that Kroger breached the merger agreement by not fully fulfilling its responsibilities to obtain regulatory approval.

Price Action: KR shares closed lower by 1.62% at $64.34 on Tuesday.

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