Attorneys General Sue to Stop Dividend Tied to Kroger-Albertsons Deal

Three attorneys general filed a federal lawsuit on Wednesday against the supermarket chains Kroger and Albertsons, seeking to prevent Albertsons from going forward with a dividend payment to its shareholders associated with its proposed $24.6 billion sale to Kroger.

The action, led by the attorney general for Washington, D.C., most likely portends larger battles to come as the grocers push for regulatory clearance for their merger. It follows other political pushback, like a letter sent last month from Senators Bernie Sanders, Independent of Vermont, and Elizabeth Warren, Democrat of Massachusetts, and Representative Jan Schakowsky, Democrat of Illinois, to the Federal Trade Commission urging its chairwoman, Lina Khan, to oppose the deal.

Kroger’s purchase of Albertsons, announced last month, would combine two chains with more than 5,000 stores across the country under well-known banners like Ralphs, Safeway and Vons. Together, the two chains have total revenue of more than $209 billion. When the deal was announced, Kroger said Albertsons would pay a “special cash dividend” to Albertsons’ shareholders as “part of the transaction.”

Last week, the attorney general of Washington, D.C., Karl Racine, sent a letter from a bipartisan group of six attorneys general calling on Albertsons to pause its dividend, which is scheduled to be paid on Monday. Mr. Racine filed the federal suit against Albertsons along with California and Illinois. On Tuesday, Washington State filed its own state lawsuit seeking to block the deal.

Article source: https://www.nytimes.com/2022/11/02/business/kroger-albertsons-dividend-lawsuit.html