It's been called the largest supermarket merger in history as Kroger and Albertsons plan to combine forces, but it appears that the deal could be dead before it happens.

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Why Do Kroger and Albertsons Want to Merge?

The two grocery giants struck a deal to merge in October 2022. The proposed marriage was billed as a move to help both chains compete with existing big retailers like Walmart, Costco, and Amazon, which owns Whole Foods. Joining forces would give the company more power to negotiate prices while cutting down on administrative costs.

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According to J.P. Morgan, the combined companies would control about 13% of the US grocery market right between Walmart's 22% and Costco's 6%.

Kroger operates 120 stores in Michigan and about 1,320 in the United States.

While Albertsons has 379 US locations, the Idaho-based chain does not currently have a footprint in Michigan.

What Stands in the Way of a Kroger/Albertsons Merger?

The $25 billion deal could be dead in the water if the Federal Trade Commission gets its way.

A suit filed by the FTC claims the merger would eliminate competition in the grocery industry, potentially driving up prices. The commission also believes the move would lead to store closures and job losses.

Henry Liu is the director of the FTC's Bureau of Competition.

"This supermarket mega-merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods," he tells CNN. 

A spokesperson for Kroger says the FTC's move to block the deal harms American consumers and workers.

 

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