Albertsons is abandoning the Kroger merger and is suing the grocery chain for failing to reach a deal

Albertsons is abandoning its merger with Kroger and suing the grocer, saying it didn’t do enough to get regulatory approval for the $24.6 billion deal.

This step was taken a day after two judges stopped meeting in different court cases. US District Court Judge Adrienne Nelson issued a preliminary injunction to block the merger on Tuesday after holding a three-week hearing in Portland, Oregon. An hour later, Judge Marshall Ferguson in Seattle issued a restraining order blocking the merger in Washington after concluding that it would reduce competition in the state and violate consumer protection laws.

Kroger and Albertsons in 2022 are proposing what would be the largest supermarket merger in US history. The companies said the merger would help them better compete with big retailers like Walmart, Costco and Amazon.

Under the merger agreement, Kroger and Albertsons — which compete in 22 states — agreed to sell 579 stores in areas where their locations intersect with C&S Wholesale Grocers, a New Hampshire-based supplier of independent supermarkets that also owns Grand Union stores. and Piggly Wiggly. brand.

But the Federal Trade Commission sued to block the merger earlier this year, saying it would raise prices and lower workers’ wages by eliminating competition. It also said that the withdrawal system was inadequate and that C&S was not equipped to handle so many stores.

On Wednesday, Albertsons said Kroger failed to exercise “best efforts” and take “any steps” to secure legal approval of the merger agreement.

Albertsons said Kroger refused to divest assets necessary for antitrust approval, ignored regulators’ feedback and rejected strong divestiture buyers.

Kroger willfully violated the Merger Agreement in several key ways, including repeatedly refusing to divest the assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting potential divestiture buyers and failing to cooperate with Albertsons.

“Kroger’s self-serving behavior, taken at the expense of Albertsons and the agreed upon service, harmed Albertsons shareholders, associates and consumers,” Tom Moriarty, Albertsons’ general counsel, said in a statement.

Kroger said it disagreed with Albertsons “in the strongest terms.” It said Wednesday morning that Albertsons faces “repeated willful material violations and disruptions throughout the merger process.”

Shares of Albertsons rose more than 2% at the opening bell, while Kroger’s stock rose slightly.