Albertsons is asking a Delaware court to make Kroger pay more than $9.3 billion over their collapsed merger, arguing in filings made public this week that its larger rival broke a contractual promise to do whatever it took to win antitrust approval for what would have been the largest grocery tie-up in U.S. history.
The claim, filed in Delaware Chancery Court ahead of a two-week trial scheduled to begin later this month before Judge Lori Will, breaks down into the premium Albertsons shareholders would have received had the $24.6 billion deal closed, plus a $600 million termination fee specified in the merger agreement and roughly $75 million in interest and additional costs, according to court filings reported by Yahoo Finance. Some other outlets have put the headline figure closer to $8 billion, a discrepancy that appears to reflect how the unspecified premium component is estimated rather than any dispute over the $600 million fee itself.
What killed the deal
The merger, which would have combined the country's two largest traditional supermarket chains, collapsed after a federal judge blocked it in December 2024, siding with the Federal Trade Commission's argument that Kroger's plan to sell off hundreds of overlapping stores to C&S Wholesale Grocers was not enough to preserve competition. Albertsons terminated the agreement shortly afterward and sued.
Albertsons now argues Kroger breached the deal's "best efforts" clause by refusing to offer regulators a larger divestiture package, even though the agreement capped Kroger's forced store sales at 650 locations. "The bottom line is that Kroger made a promise and broke it," Albertsons said in its filing, accusing Kroger of sticking to a "failing lowball strategy right through the litigation that ended the deal."
Kroger rejects the claims, saying it pursued every available path to secure approval, and has countered that Albertsons itself undermined the process by coordinating with C&S Wholesale Grocers to push regulators toward demanding a bigger divestiture than Kroger was prepared to make. C&S has said its communications with regulators were aimed only at securing approval and complied with its contractual and legal obligations. Kroger did not immediately comment on the latest filing.
Money on the line for both sides
The stakes are real for Albertsons shareholders, particularly Cerberus Capital Management, which held more than 30% of the grocer's stock as of late June and stands to benefit most directly if the court sides with Albertsons. The company has had a rough year independent of the litigation: Albertsons cut its annual sales and profit forecasts in July, and its stock fell more than 20% as Chief Executive Susan Morris pointed to pressure from Walmart and Amazon pulling customers away from traditional supermarkets.
For Kroger, a loss at trial would add a multibillion-dollar liability on top of the reputational cost of a deal that consumed two years of regulatory fights without ever closing. The two-week trial is expected to produce a ruling in the coming months, and will be closely watched by dealmakers across the consolidating U.S. grocery sector as a test of how aggressively "best efforts" clauses can be enforced when an acquisition runs into antitrust resistance.