Kroger and Albertsons agree to $20 billion mega-merger

They’re gonna need two carts.

Kroger agreed to purchase fellow grocery store giant Albertsons for $20 billion in a mega-merger expected to draw government scrutiny.

The two companies announced the deal Friday, with Kroger also agreeing to gobble up $4.7 billion in Albertsons debt.

If approved by the federal government, the deal would unite the nation’s second-largest grocery company (Kroger) and fourth-largest (Albertsons) under one umbrella. Even if the deal goes through, Walmart will remain the largest grocer in the U.S.

The two companies expected the scrutiny and said they would spin off approximately 400 stores to avoid any monopoly concerns. That wasn’t enough to satisfy Sen. Bernie Sanders.

“At a time when food prices are soaring as a result of corporate greed, it would be an absolute disaster,” the 81-year-old senator from Vermont wrote in a tweet. “The Biden Administration must reject this deal.”

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But Sanders won’t have any say on whether the merger goes through. That responsibility will fall on the Federal Trade Commission, which President Biden has asked to look closely at big deals. A similar merger in the less visible book publishing industry wound up in federal court as the FTC argued against it. Stephen King even testified on the government’s side.

Kroger’s many brands include King Soopers, Ralphs and Harris Teeter. Albertsons owns Safeway, Jewel Osco and Shaws, along with several other stores.

“We are bringing together two purpose-driven organizations to deliver superior value to customers, associates, communities and shareholders,” Kroger CEO Rodney McMullen said in a press release. McMullen will keep his position after the deal is completed.

The merger will likely involve stores closing, which could be a complicated process because many Kroger and Safeway employees are unionized. Together, the companies employ more than 700,000 people.

“The proposed merger of these two grocery giants is devastating for workers and consumers alike and must be stopped,” said Kim Cordova, president of a union representing more than 6,000 Safeway employees.

Albertsons had announced in February that it was considering a sale.

With News Wire Services