Supermarket chain Kroger’s (NYSE:KR) proposed acquisition of rival Albertsons (NYSE:ACI) is now expected to close in the first half of Kroger’s fiscal year 2024 instead of early this year. The companies said ongoing discussions with federal regulators delayed the deal’s close.
Kroger, Albertsons and C&S Wholesale Grocers said they are in “active and ongoing dialogue” with the Federal Trade Commission and individual state attorneys general, according to the joint statement. “While this is longer than we originally thought, we knew it was a possibility and our merger agreement and divestiture plan accounted for such potential timing.”
In a bid to close the proposed $24.6-billion deal, Kroger agreed in September to divest 413 stores and eight distribution centers to C&S for $1.9 billion. With regulatory approval, the merger may require C&S to purchase an additional 237 stores from Kroger and Albertsons, Kroger said last year.
Kroger noted that it plans to invest $500 million to reduce prices and $1.3 billion to enhance customer experience. The grocery chain also said it will invest an incremental $1 billion to raise wages and benefits for all associates after the deal is done.
Kroger is the nation’s largest grocer with nearly 2,800 stores, while Albertsons is the second-biggest and owns brands such as Safeway and Acme.
The proposed merger — which was previously set to be completed by early 2024 once the Federal Trade Commission completes its antitrust review — has faced intense opposition from U.S. lawmakers and political leaders due to antitrust concerns.
KR shares ditched 12 cents to $45.91, while those for ACI descended 19 cents to $22.52.
