As regulators review the proposed merger of supermarket giants Albertsons and Kroger, corporate owners of Vons and Ralphs, California Attorney General Rob Bonta and two other AGs Wednesday asked a federal court to temporarily block Albertsons’ planned $4 billion payment of a special dividend to shareholders.
The payment is planned for Monday, and the AGs expressed concern that it would hamper Albertsons’ ability to compete. Their complaint follows a letter sent to Albertsons and Kroger last week arguing that the planned payout is premature and would substantially deplete Albertsons’ cash flow as inflation drives up prices and an economic downturn appears imminent.
The AGs are seeking to delay the payout while regulatory review of the proposed merger is ongoing.
“As inflation drives up grocery prices, a decrease in competition has the potential to be devastating for hardworking California families and for those who work at these stores. This proposed merger is far from a done deal, making Albertsons’ decision to give away one-third of its market cap very concerning. I urge the court to delay this payout to allow for a thorough consideration of its impacts on Albertsons’ ability to compete while the proposed merger is under review,” the statement continued.
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.
Bonta said the state attorneys general are dedicated to ensuring that the proposed merger of the grocery behemoths complies with federal and state antitrust law and does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects.
Updated at 5:04 p.m. Nov. 2, 2022
City News Service contributed to this article.