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After Failed Merger Between Kroger And Albertsons, Legal Back-and-forth Continues With Countersuit

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After Failed Merger Between Kroger And Albertsons, Legal Back-and-forth Continues With Countersuit

Late last year, federal and state courts blocked a proposed merger between Cincinnati-based Kroger and fellow grocery behemoth Albertsons.

Albertson sued, accusing Kroger of mishandling the failed merger. Now, Kroger is firing back with a countersuit.

In a March 25 news release, Kroger accused Albertson executives with secretly working to undermine the deal and develop a "Plan B" to sue Kroger if the merger fell through.

Here's a look at what's happening.

After the merger fell through, Albertsons terminated its agreement with Kroger in December. They sued Kroger for breach of contract. Albertsons also asked for billions of dollars in damages along with a $600 million termination fee.

In its lawsuit, Albertsons claimed Kroger mishandled its approach to securing regulatory approval for its 2022 agreement to buy Albertsons in an attempt to derail the merger.

Previously: Report: Kroger sued (again) over canceled Albertsons merger

The original terms of the agreement called for Kroger and Albertsons to sell off hundreds of stores to C&S Wholesale Grocers to avoid antitrust concerns and secure federal and state regulatory approval.

Kroger denied Albertsons' breach of contract claims and filed a countersuit accusing Boise, Idaho-based Albertsons of going behind its back in an attempt to gain approvals.

Previously: Here's why the Kroger merger with Albertsons was killed

The countersuit alleges Albertsons worked with C&S Wholesale using personal email addresses and cell phone numbers to pressure Kroger to sell off more stores and assets than it originally had planned.

Kroger said in the news release it's seeking damages from Albertsons "as a result of its willful misconduct and material breaches of the merger agreement."

In a statement sent to the USA TODAY Network, an Albertsons spokesperson called Krogers claims "weak" and "a deliberate tactic to distract from its own ongoing executive leadership issues; blatant and recurring failures to carry out its contractual obligations under the Merger Agreement; and avoid paying the damages it owes to Albertsons."

Albertsons officials claim, in the statement, that Kroger didn't hold up their end of the deal and they "doomed" the merger.

"As highlighted by multiple judges in the decisions blocking the merger, Kroger – under the leadership of former CEO Rodney McMullen – acted in its own financial self-interest, proposing insufficient divestiture packages that repeatedly ignored regulators' concerns, mismanaging the process of identifying a divestiture buyer, and failing to cooperate with Albertsons," the statement said.

This story has been updated to add new information.

This article originally appeared on Louisville Courier Journal: Kroger countersues Albertsons over failed merger


How Publix's Arrival To Tri-State Could Impact Shoppers, Kroger

CINCINNATI (WXIX) - Publix is coming to Northern Kentucky, looking to make a dent in the stronghold Kroger has on area grocery shoppers.

The first Publix opening in Northern Kentucky is the Walton location on March 26.

This is one of five locations planned for the area.

Pub subs, sweet tea and fresh produce are what Publix is best known for. Their low prices, not so much.

In an area where more than a dozen Krogers exist and a time when inflation is a concern, can a handful of Publix stores make Tri-State customers switch their loyalty?

"Kroger has a really thick fan base and loyal customers in the greater Cincinnati area because of its history," explains University of Cincinnati economics professor Dr. Eunjee Kwon.

Dr. Kwon acknowledges while there are several grocery options nearby, we live in a Kroger-dominated market with 16 locations in Northern Kentucky alone and their headquarters in downtown Cincinnati.

She knows some shoppers will stay loyal to Kroger, but the unique products a chain like Publix brings will most likely make the market more competitive.

"I think what Publix will bring into the market, in terms of the competition, is they're going to provide [a] different set of products, and also on the internet, for example, social media is really about the pub-sub that everyone loves," Dr. Kwon says. "That's another type of a product that, as of now, Kroger, at this point, cannot offer."

The pub-sub is a main attraction, but aside from viral social media offerings, what else could the five Publix locations offer consumers?

"I know the Kentucky and each store will employ approximately 140 to 150 associates," Publix media relations manager Jared Glover says. "So, really looking to enhance sort of the economy in the area, provide jobs to local citizens."

That is the potential for at least 750 combined new jobs at the five locations.

Right now, Kroger operates 76 stores in Cincinnati and Northern Kentucky, employing around 14,000 associates.

[Watch more from FOX19 NOW]

When it comes to shopping, Dr. Kwon thinks the consumers who want cheaper prices, will not change their ways, but others will be interested in trying what a new store has to offer.

"Probably they're not competing based on the pricing, but they are competing based on the more diverse product and a more unique customer experience," Dr. Kwon theorizes. "So, Kroger will need to think about how to not lose their loyal customers to this new entry of the retailer, by thinking about how to innovate."

While Kroger, Walmart and Aldi still have more locations in the Tri-State, Dr. Kwon says the expansion of more stores will always benefit customers.

Dr. Kwon also mentioned the greater Cincinnati and Northern Kentucky area is growing.

The average income of local households varies, so she says there should be enough room for higher-end grocery stores and value stores.

The Publix in Walton opens at 7 a.M. March 26 in the Triple Crown Shopping Center on Richwood Road.

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