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Update 7:05pm: Adds Kroger comment.
California is preparing a lawsuit to challenge Kroger’s (NYSE:KR) planned $24.6 billion acquisition of smaller rival Albertsons (NYSE:ACI), according to California Attorney General Rob Bonta. Albertsons shares slipped 0.8% in after hours trading, while Kroger fell 1.6%.
“We are moving toward acting,” Bonta told reporters in Washington, according to a Bloomberg report. “Right now, there’s not a lot of reason not to sue.”
Bonta said he met with US Federal Trade Commission Chair Lina Khan earlier in the day and discussed the transaction with her.
The report comes as Kroger (KR) has been working to try to appease the FTC so the antitrust regulator can approve the deal, including a plan announced last month to sell 413 stores for $1.9 billion to C&S Wholesale Grocers.
Kroger (KR) responded to the California AG’s comments.
“Only non-unionized retailers, like Walmart and Amazon, will benefit if this merger is blocked,” Kroger said in an emailed statement to Seeking Alpha. “In fact, Kroger joining with Albertsons will mean lower prices for customers, secure union jobs and more food directed to hungry families, with 10 billion meals committed to people in need across America by 2030.”
Bonita said he has looked at the divestiture plan and is still deciding if he will go forward with a lawsuit, according to a Bloomberg account of the press conference.
An Axios Pro report last month claimed the FTC is likely to challenge the supermarket combination. Albertsons (ACI) and Kroger (KR) were expected to meet with the FTC to try to give assurances on the deal and that the number of planned divestitures could be increased.
Kroger (KR) and Albertsons (ACI) received a second request from the FTC in December on the deal. Nevada, along with at least 16 other states, are investigating the combination.
