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FTC delays decision on Kroger-Albertsons merger
The FTC typically makes a decision on merger issues like this within 30 days, but it appears we will have to wait until January to see if Kroger can merge with Albertsons.
DALLAS - Many expected a decision on Friday by the Federal Trade Commission on the fate of a possible merger between Kroger and Albertsons.
Now, it looks like a decision won’t come down until mid-January.
The FTC typically makes a decision on merger issues like this within 30 days, but it appears we will have to wait until January to see if Kroger can merge with Albertsons.
It’s a $25 billion deal for Kroger to buy Albertsons, which also impacts Tom Thumb under the Albertsons banner.
The deal is facing legal challenges in other states.
Kirti Sinha is an accounting professor at the University of Texas at Dallas doing research on mergers and acquisitions.
"In Dallas, they are not a monopoly. But in Oregon and Washington, if they were to merge, they would be the only company selling groceries," she explained.
Here's where Kroger and Albertsons are selling stores ahead of their merger
Kroger and Albertsons will sell more than 400 stores and other assets for about $1.9 billion, seeking to clear a path for a merger with antitrust regulators reviewing a deal that would unify two of the nation's largest grocery chains.
This month, Kroger investors were told the deal would mean selling off more than 400 stores, including 26 in Texas.
Sinha notes the FTC under Chairwoman Lina Khan has changed recently, especially with mergers that may have previously sailed through.
"In the current climate and the way industries have been functioning, that may not be true," she said. "You cannot look at consumer welfare as the only thing. You need to look at workers, look at supplies. Are their bargaining powers going down because of this merger."
This week, six members of Congress sent a letter to the FTC.
Sen. Elizabeth Warren thinks the merger will weaken competition.
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Kroger, Albertsons leaders believe merger will reduce prices for consumers, experts aren't so sure
The Senate Judiciary Committee's Antitrust panel questioned the leaders about the $25 billion deal for Kroger to purchase Albertsons stores.
But Kroger CEO Rodney McMullen has said the merger will allow the company to better compete against retail giants Walmart and Amazon.
Albertsons stores are in North Texas, but Tom Thumb has a bigger footprint. It’s unclear if any of those locations are among the 26 in the proposed selloff.
Sinha says there is concern about divesting.
"When Albertsons acquired Safeway, they divested stores," she said. "But eventually, the company, they divested to went bankrupt, and Albertsons eventually got those stores back."
McMullen claimed if the merger goes through, food prices would come down and employee wages would go up.