Attorney General Bonta Demands Albertsons Delay $4 Billion Investor Payout Until State, FTC Complete Review of Proposed Merger with Kroger

Wednesday, October 26, 2022
Contact: (916) 210-6000,

OAKLAND – California Attorney General Rob Bonta and five other state attorneys general today sent a letter demanding that Albertsons delay a $4 billion payout to stockholders until state attorneys general and the Federal Trade Commission (FTC) complete their review of its proposed merger with Kroger. Albertsons and Kroger supply daily necessities to millions of people throughout the United States and employ more than 700,000 workers in communities across the country. The state attorneys general are dedicated to ensuring that the proposed merger of these grocery behemoths does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects. With regulatory approval of the merger far from assured, this “special dividend” is premature and stands to dramatically hamper Albertsons’ ability to compete. 

“Californians are feeling the high cost of inflation every time they pull out their wallet at the grocery store checkout,” said Attorney General Bonta. “With nearly 5,000 stores between them, Albertsons and Kroger are two of the largest grocery chains in the United States. Their proposed merger requires careful review — to ensure their customers and employees do not pay a price through higher grocery bills, food deserts, and lower wages. My colleagues and I demand that Albertsons delay its planned $4 billion payout to investors until review of the proposed merger is complete. I, frankly, have a hard time seeing how Albertsons would be able to continue to compete — as it is obliged to do during the pendency of merger review — after giving away a third of its market share.” 

In the letter, the attorneys general express their strong concern with Albertsons and Kroger’s joint announcement that Albertsons will pay stockholders a cash dividend of up to $4 billion on November 7, 2022. Federal and state antitrust laws forbid parties from entering in agreements that substantially lessen competition or unreasonably restrain trade. Premerger notification requirements also prohibit “gun jumping,” the practice of improperly engaging in joint decision-making by parties pending merger review. The planned dividend payment would substantially impact Albertsons cash flow, making it difficult to continue to compete with Kroger ahead of the merger. 

Grocery prices rose 12.2% from last summer to this summer, the biggest jump in over 40 years. If the proposed merger has anticompetitive effects, nearly every corner of this country will feel them. Right now, regulatory approval of the merger is far from assured. In the letter, the attorneys general highlight that, should a regulatory challenge to the merger succeed or should the parties abandon the transaction, it would be near impossible for Albertsons to recover if it has gifted away such a significant portion of its cash flow.

Attorney General Bonta joins the attorneys general of District of Columbia, Arizona, Idaho, Illinois, and Washington in sending the letter.

A copy of the letter is available here.

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