A judge in Washington state has temporarily blocked Albertsons from paying a $4 billion dividend to investors as part of the grocery retailer’s proposed merger with rival Kroger.
The proposed merger would combine two of the nation’s largest grocery chains. Some critics worry that could mean reduced competition, higher food prices and the closure of under-performing locations, including some in Washington state. Albertsons, which owns Safeway, and Kroger, which owns QFC and Fred Meyer, are among the biggest players in Washington.“Putting the brakes on this $4 billion payment is a huge win for consumers nationwide,” Ferguson said Thursday afternoon on Twitter.
Next Thursday, King County Superior Court Judge Ken Schubert is scheduled to more closely review arguments in the case.In a lawsuit filed Tuesday, Ferguson argues the dividend is illegal because it potentially undercuts the ability of Albertsons to keep all its locations open in the several years needed to complete the merger., California and the District of Columbia, which on Wednesday jointly sued to block the dividend in federal court in Washington, D.C.
Kroger and Albertsons have agreed to put the divested locations in a standalone company, managed by Albertsons, and then sell them to a competing retailer or retailers as part of the approval process.However, some antitrust and business experts question whether locations chosen for divesture might already be struggling financially.
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