Kroger and Albertsons Put an $8 Billion Merger Failure on Trial

Kroger and Albertsons are back together in a Delaware courtroom, this time fighting over who should absorb the cost of their failed $24.6 billion merger. Albertsons is seeking at least $8 billion, including a $600 million termination fee and claimed shareholder losses.

The two-week bench trial began October 19 before Vice Chancellor Lori Will. A decision could take months and can be appealed to the Delaware Supreme Court.

Competing accounts of the same failure

Albertsons says Kroger promised to take all necessary steps to obtain antitrust approval but refused to offer enough viable stores for divestiture. It argues Kroger favored its own profit goals and selected a riskier proposal from C&S Wholesale Grocers after undermining a competing bid from SpartanNash.

Kroger denies breaching the agreement. It says both companies understood that regulators might reject the transaction and that it spent heavily, with outside antitrust counsel, trying to win approval. Kroger also argues that unauthorized contacts between Albertsons' then-chief operating officer Susan Morris and C&S damaged the process. Albertsons says those conversations concerned a possible job and did not improperly share merger information.

The Federal Trade Commission and state attorneys general challenged the deal, and courts blocked it in December 2024. That history means Albertsons must show more than a failed outcome. It must connect Kroger's conduct to the lost approval and to the damages it claims.

Why the case matters to shareholders

The requested damages are large relative to Albertsons' market value and potentially material to Kroger. Yet the headline figure is a claim, not a liability already recognized. The court may reject parts of the theory, reduce damages or find that regulatory opposition would have blocked the transaction regardless of either company's choices.

The trial will test how Delaware interprets a buyer's obligation to pursue regulatory clearance when a merger agreement demands unusually strong efforts. Former chief executives and advisers are expected to testify about store sales, regulator feedback and the choice of C&S.

For investors, the key evidence is not courtroom rhetoric but documents showing which divestitures were available, why they were rejected and whether a different package had a realistic path to approval.