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Kroger, Albertsons merger could face FTC, multi-state lawsuit

Colorado and Washington state are already suing to stop the acquisition

Lawsuits from attorneys general in Colorado and Washington state could just be the beginning of a number of legal hurdles for Kroger in its effort to acquire competitor Albertsons, according to a story reported in Bloomberg on Tuesday. 

Bloomberg reports that another lawsuit could be coming from the U.S. Federal Trade Commission, which several other states are expected to join, according to an insider familiar with the issue. 

Colorado Attorney General Phil Weiser filed a lawsuit in mid-February to block the acquisition, joining Washington state, which has also sued to stop the $24.6 billion megamerger.

The lawsuit from the Colorado AG’s office alleges that Kroger and Albertsons, which are the two largest grocery chains in the state, have colluded to bust union activity already through a “no-poach” agreement that they would not hire rival employees on strike.  

The companies have publicly denied the allegation. 

An FTC spokesperson declined to comment on the Bloomberg story, which says the FTC lawsuit is expected sometime before Feb. 28. The report notes that “several states” are expected to join the lawsuit. 

Word of the possible lawsuit comes just a few days after a union primarily made up of grocery workers in the Pacific Northwest region endorsed the proposal, arguing that if Cerberus Capital Management, which purchased Albertsons in 2005, doesn’t sell to Kroger, then it will sell to someone else.

“It’s foolish to think that stopping this merger means everything will stay the same,” said Ann Poff, vice president, UFCW Local 555, in a press release. “Forcing Cerberus to continue to own Albertsons isn’t an option. If they don’t sell to Kroger, it will be someone else. Our members would rather work for people who run grocery stores over online or big-box retailers. 

“This merger, combined with a significant divestiture to C&S, represents a good outcome for workers caught in the wake of a private equity company that wants to sell Albertsons.”

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