Albertsons Chases $9.3 Billion From Kroger as Merger Trial Opens

Albertsons is asking a Delaware court for $9.3 billion — a $600 million breakup fee plus more than $8 billion in claimed shareholder-value losses — as the trial over its failed merger with Kroger opens Monday in the Delaware Court of Chancery.

The $24.6 billion deal, terminated in December 2024, would have been the largest merger in supermarket industry history. Now the two largest conventional grocers in the U.S. are fighting over who bears the cost of its collapse.

Former Albertsons CEO Vivek Sankaran is expected to testify first, according to reports, followed by Rodney McMullen, Kroger's ex-CEO, and two antitrust attorneys who advised the chains. Both CEOs left their posts soon after the deal fell apart: McMullen was forced out last March for undisclosed ethical violations tied to his personal conduct; Sankaran retired a few months later.

Who else testifies?

• Ted Hassi, outside attorney who counseled Albertsons
• Michael Bernstein, outside attorney who counseled Kroger on the merger's antitrust implications
• Tom Moriarty, Albertsons' EVP of mergers and acquisitions and corporate affairs

Judge Lori Will will decide the bench trial without a jury. It's scheduled for two weeks, though reports say a ruling could take months, with possible appeal to the Delaware Supreme Court.

What does Albertsons allege?

The core claim: Kroger's efforts to satisfy antitrust regulators were insufficient. Kroger's divestiture plan (selling stores to clear regulatory concerns) started at 238 stores and grew to 579, with C&S Wholesale Grocers lined up as buyer. Albertsons argues Kroger picked its weakest performers — the stores headed to C&S — so that the stores Kroger kept would be its most profitable.

Albertsons also claims Kroger ignored the FTC's guidance on supermarket divestitures and failed to adequately engage the state attorneys general investigating the deal.

The math matters for wholesale watchers: which stores moved to C&S — and on what terms — would have reshaped C&S's retail footprint and the grocery supply chain behind it.

What is Kroger's defense?

Kroger says it invested more than $1 billion in pushing the merger through but faced regulators determined to block it. The original agreement capped divestitures at 650 stores; Kroger argues it would have needed to exceed that ceiling to satisfy an antitrust investigation it says applied an overly narrow view of the competitive grocery market.

In short: Kroger frames the failure as regulatory overreach, Albertsons as contractual bad faith.

Can Albertsons collect the full $9.3 billion?

Probably not easily. Citing Bloomberg Intelligence, BusinessMirror.com reports that Albertsons faces an uphill battle to recover damages beyond the $600 million breakup fee, because it must show Kroger willfully violated the merger agreement's terms.

That's a high bar. The $600 million fee was written into the deal when it was announced; the $8 billion-plus damages claim came later, built on shareholder value lost since the merger fell through.

Since the termination, both chains have retrenched:

• Both Kroger and Albertsons have shuttered stores and moved to slash costs
• Albertsons is running a comprehensive business review that could see asset sales
• Kroger said last week it plans to cut 3,000 corporate staff over the next three years

For distributors and suppliers serving grocery, the fallout is concrete: a smaller corporate footprint at Kroger, potential asset disposals at Albertsons, and C&S left without the 579-store retail portfolio it had been promised.

Whatever Judge Will rules — and appeals could stretch the timeline well past a verdict — the decision will set a price on who pays when a mega-merger dies in regulatory review.