Kroger and Albertsons have released a list of hundreds of stores that would be divested to C&S Wholesale Grocers if federal regulators approve its proposed $24.6 billion merger deal, and the states with the largest numbers include Washington, Arizona, and Colorado.
Under the proposal, Kroger and Albertsons would divest stores in Washington (124), Arizona (101), Colorado (91), California (63), Oregon (62), Illinois (35), Texas (28), Nevada (16), and Alaska (18). Several states would see 10 or fewer stores divested, including Idaho (10), New Mexico (9), Wyoming (5), Maryland and Utah (4), Virginia (3), Louisiana and Montana (2), and Washington, D.C., and Delaware (1). Kroger also revealed the locations of six distribution centers that would be divested to C&S under the plan. Those are located in Phoenix and Tolleson, Arizona (2); Denver, Colorado, (2); Salt Lake City, Utah, (1); and Auburn, Washington (1). A dairy plant located in Denver would also go to C&S if the $24.6 billion merger deal is approved.
TRYING TO GET THE MERGER DONE
Kroger and Albertsons have positioned their intention to part ways with stores as a key reason their proposed merger should not be deemed a threat to competition since first announcing the megadeal in 2022. Still, opponents of the deal have taken a dim view of the divestiture proposal from the start.
The Federal Trade Commission, which is seeking a court order to derail the merger on antitrust grounds, in February dismissed the companies’ original arrangement to sell 413 stores and other assets to C&S as “far short of mitigating the lost competition.” Kroger and Albertsons responded in April with a revised plan to sell 579 stores along with a richer mix of non-store assets. However, they did not publicly reveal which locations they have marked for divestiture until Tuesday.
The supermarkets Kroger and Albertsons plan to sell fall under 13 banners and are located in 18 states and Washington, D.C. The list encompasses 282 Safeway stores and 99 Albertsons locations as well as numerous stores under banners including QFC, Vons, Carrs, Pavilions, and Tom Thumb.
Kroger stated the divestiture plan “is critical to bringing the meaningful and measurable benefits of our merger with Albertsons to associates, customers, and communities across America. C&S committed to ensuring zero stores will close as a result of the merger, all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading benefits alongside bargained-for wages.”
THE DIFFICULTIES FACED BY KROGER AND ALBERTSONS.
The FTC and other critics have asserted that C&S is not strong enough to operate a competitive grocery chain, sparking strong responses from Kroger and Albertsons. A federal judge in Oregon is scheduled to begin a hearing on Aug. 26 to consider a request by the FTC for a temporary restraining order to block the merger.
In a joint statement issued after the list was released, several United Food and Commercial Workers Union locals said they remain opposed to the merger plan. “Today’s announcement changes nothing. The merger is not a done deal, far from it. We remain focused on stopping the proposed mega-merger for the same reasons we have stated since it was first announced over 20 months ago — because we know it would harm workers, it would harm shoppers, it would harm suppliers and communities, and it is illegal,” the labor groups said.