Senate Skeptics of Kroger-Albertsons Merger Announce Hearing

Leah Nylen and Brendan Case
·2 min read
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(Bloomberg) -- Two US senators said they will hold a hearing in November on Kroger Co.’s planned $24.6 billion takeover of Albertsons Cos. that would highlight its impact on competition among grocery stores.

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Minnesota Senator Amy Klobuchar and Utah Senator Mike Lee, the top Democrat and Republican on the Senate Judiciary antitrust panel, expressed “serious concerns about the proposed transaction” in a statement announcing the hearing Tuesday.

Separately, in a joint letter to the US Federal Trade Commission, Klobuchar and two other Senate Democrats also asked the agency to closely scrutinize the deal, saying it “raises considerable antitrust concerns.”

“The grocery industry is essential to daily life, and Americans need the benefits that robust competition bring,” they wrote.

The Senate antitrust panel has no authority over merger reviews, but often holds hearings on high-profile deals. It also makes recommendations on the FTC’s funding for antitrust enforcement actions. Klobuchar and Lee back legislation that would increase the amount of money that companies pay for merger reviews to better fund antitrust enforcement.

The two grocery chains announced the proposed tie-up last week, pledging to divest as many as 375 stores to appease antitrust regulators. Kroger is the second-largest grocer in the US after Walmart Inc., according to data from Numerator, with Albertsons coming in fourth behind Costco Wholesale Corp.

“We welcome the opportunity to outline how this transaction will benefit America’s consumers by expanding access to fresh, affordable food and establishing a more compelling alternative to large, non-union retailers,” Kroger said in a statement.

The deal is likely to face a tough review at the FTC where Chair Lina Khan has expressed skepticism about grocery mergers that rely on spinoffs to preserve competition in select markets. The agency in 2015 allowed Albertsons to buy Safeway Inc. on condition that it divest 168 stores.

Albertsons bought 33 stores back less than a year after the deal closed when the buyer went into bankruptcy, an outcome Khan called a “spectacular” failure in a 2017 law review article.

(Updates to add details on merger)

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