CINCINNATI — The Kroger-Albertsons merger will not happen before Sept. 30, under a court order approved by a state court judge in Colorado Thursday.
The ruling clears a path for a "bellwether" trial next month in which a federal judge will determine if the deal violates antitrust laws.
Denver Judge Andrew Luxen canceled an Aug. 12 hearing on the matter in exchange for the companies’ agreement not to consummate the $24.6 billion merger until the Colorado court rules on whether violates state antitrust rules. Luxen scheduled a Sept. 30 trial to determine whether he’ll grant a permanent injunction.
“I am pleased that Kroger and Albertsons agreed to halt their plans to merge until the court rules on the state’s lawsuit to permanently block the grocery merger,” said Colorado Attorney General Phil Weiser in a statement. “This is great news for shoppers, workers, farmers, and other suppliers, who can rest assured that this megamerger will not go into effect during harvest season and while kids are headed back to school.”
Kroger also released a statement:
“Today’s decision is welcome news as it eliminates the need for a preliminary injunction hearing in Colorado that was previously scheduled to begin August 12. The hearing on the state’s request for a permanent injunction will go forward as scheduled on September 30. We look forward to defending in court how the combination of Kroger and Albertsons will provide meaningful, measurable benefits, including lower prices and more choices for families across the country and more opportunities for stable, well-paying union jobs.”
Kroger and Albertsons are facing four different legal challenges to the merger, which Kroger claims will lead to lower prices and better wages for its union workers while critics claim the deal will harm shoppers and workers by eliminating competition.
Attorneys general in Colorado and Washington have challenged the deal in state court actions while the Federal Trade Commission is simultaneously pursuing a federal lawsuit and FTC administrative hearing to block the merger.
Experts say the federal lawsuit is likely the most important case because it’s national in scope and mergers blocked by federal judges are rarely challenged on appeal.
“It is possible that even if the government lost the big case in federal court that one of the two A.G.s might persuade (state) court to bar a merger,” said Loyola University Chicago Law Professor Spencer Waller. “It would be less likely that the courts in those state cases would bar the merger on a nationwide basis, but they might find a merger violation in Colorado or Washington.”
U.S. District Judge Adrienne Nelson has scheduled a three-week trial that begins Aug. 26 that will be the parties’ first chance to attack and defend the merger in detail. Earlier this month, FTC Chief Administrative Law Judge D. Michael Chappell agreed to delay an evidentiary hearing until after the federal trial ends.
Waller said Judge Nelson has the “bellwether case,” but “they’re all important. The companies need to run the table.”
