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Will the feds block a grocery megamerger? Kroger and Albertsons will soon find out
Will America’s two largest grocery store chains get to become one?
That’s the question before U.S. regulators, who are deciding whether to block Kroger’s $24.6 billion purchase of Albertsons. Several state attorneys general, too, have signaled they might sue to halt the deal.
At stake is a shakeup of the U.S. grocery landscape, where the companies say they face stiffening competition from Amazon, Walmart, Costco and even dollar stores. Employees, state officials and some lawmakers have argued the tie-up would reduce options for shoppers and workers, farmers and food producers.
Kroger, the biggest U.S. supermarket operator with 2,719 locations, owns Ralphs, Harris Teeter, Fred Meyer and King Soopers. Albertsons, the second-largest chain with 2,272 stores, owns Safeway and Vons. Kroger employs about 430,000 people; Albertsons 290,000.
The chains overlap particularly in Western states. The companies tried to assuage regulators’ concerns about diminishing grocery competition in those markets by agreeing to sell up to 650 stores as part of the deal.
However, antitrust experts in the Biden administration in the past have expressed skepticism about whether divestitures can sufficiently protect competition — on prices, jobs or terms for suppliers, for example. The regulators have also pushed for tougher scrutiny of megadeals, making this merger a high-profile test.
The Federal Trade Commission has been reviewing the proposed deal for over a year and is expected to make its call as early as this month. A lawsuit to stop the deal would not be a shocker. In May 2023, Kroger CEO Rodney McMullen said the grocery chains “committed to litigate in advance” if federal regulators or state attorneys general rejected the deal.
Combining forces to compete with Walmart
Ohio-based Kroger and Idaho-based Albertsons say together, they’d be in a stronger position to compete against Amazon online and Walmart in physical stores. The latter is the nationwide leader in groceries, selling more than Kroger and Albertsons combined.
“This merger will help protect the local community grocery stores that people love,” Albertsons CEO Vivek Sankaran said in his testimony at a Senate antitrust hearing in 2022.
The companies also argue that together they would be able to lower prices and pay higher wages. They emphasize that they offer union jobs, in contrast to their rivals.
Yet, the United Food & Commercial Workers Union, which represents more than 350,000 workers across the two grocery chains, opposes the merger. At public forums around Colorado, for example, workers noted it could become more difficult to negotiate a union contract with an even bigger, more dominant employer.
“The areas [our members] are concerned with are what happens to competition and food prices,” UFCW International President Marc Perrone said, adding that his members also worried about the long-term prospects for their current collective bargaining agreements.
Will selling off stores satisfy regulators?
Grocery competition historically gets assessed on a local level: Will shoppers in a given area have fewer options after the merger? Trying to address this, Kroger and Albertsons in September agreed to sell at least 413 stores in locations where they overlapped to C&S Wholesale Grocers, a supplier company that also runs some Piggly Wiggly supermarkets.
C&S agreed to buy retail locations in Arizona, California, Colorado and Wyoming, as well as some private brands, distribution centers and offices. The company said it was “committed to retaining” the stores’ existing workers, pledging to recognize the union workforce and keep all collective bargaining agreements.
Perrone said his union welcomed this decision, but remains concerned about the merger’s approval hinging on the sale to the much-smaller C&S:
“Can they operate efficiently and be competitive to where the customers, over the long haul, will stay with them?” he said.
Many antitrust experts in recent years have questioned the effectiveness of such divestitures.
For instance, when Albertsons merged with Safeway in 2015, the FTC required it to sell off 168 stores as part of the deal. Within months, one of its buyers filed for bankruptcy protection and Albertsons repurchased 33 of those stores on the cheap.
“Over time, there has been some skepticism about how well divestitures work,” said Kathleen Bradish, acting president of the American Antitrust Institute, which advocates for tougher scrutiny of mergers. “The divestitures that were deemed acceptable in the past may not be acceptable 1704815830.”
Indeed, federal antitrust regulators last year updated their guidelines for policing mergers to include, for example, greater focus not only on how deals affect prices or consumer choice but also suppliers or workers.
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Map: 4.9-Magnitude Earthquake Shakes Louisiana
Note: Map shows the area with a shake intensity of 4 or greater, which U.S.G.S. defines as “light,” though the earthquake may be felt outside the areas shown. The New York Times
A light, 4.9-magnitude earthquake struck in Louisiana on Thursday, according to the United States Geological Survey.
The temblor happened at 5:30 a.m. Central time about 6 miles west of Edgefield, La., data from the agency shows.
U.S.G.S. data earlier reported that the magnitude was 4.4.
As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.
Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Central time. Shake data is as of Thursday, March 5 at 8:40 a.m. Eastern. Aftershocks data is as of Thursday, March 5 at 10:46 a.m. Eastern.
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Donald Trump has no ‘phase two’ plan for Iran war, says US senator
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Man accused of plot to assassinate Trump testifies Iran pressured him, says Biden and Haley were other possible targets
The allegation sounded like the stuff of spy movies: A Pakistani businessman trying to hire hit men, even handing them $5,000 in cash, to kill a U.S. politician on behalf of Iran ‘s powerful paramilitary Revolutionary Guard.
It was true, and potential targets of the 2024 scheme included now-President Donald Trump, then-President Joe Biden and former presidential candidate and ex-U.N. Ambassador Nikki Haley, the man told jurors at his attempted terrorism trial in New York on Wednesday. But he insisted his actions were driven by fear for loved ones in Iran, and he figured he’d be apprehended before anything came of the scheme.
“My family was under threat, and I had to do this,” the defendant, Asif Merchant, testified through an Urdu interpreter. “I was not wanting to do this so willingly.”
Merchant said he had anticipated getting arrested before anyone was killed, intended to cooperate with the U.S. government and had hoped that would help him get a green card.
U.S. authorities were, indeed, on to him – the supposed hit men he paid were actually undercover FBI agents – and he was arrested on July 12, 2024, a day before an unrelated attempt on Trump’s life in Butler, Pennsylvania. During a search, investigators said they found a handwritten note that contained the codewords for the various aspects of the plot, CBS News previously reported.
Merchant did sit for voluntary FBI interviews, but he ultimately ended up with a trial, not a cooperation deal.
“You traveled to the United States for the purpose of hiring Mafia members to kill a politician, correct?” Assistant U.S. Attorney Nina Gupta asked during her turn questioning Merchant Wednesday in a Brooklyn federal court.
“That’s right,” Merchant replied, his demeanor as matter-of-fact as his testimony was unusual.
The trial is unfolding amid the less than week-old Iran war, which killed Iranian Supreme Leader Ayatollah Ali Khamenei in a strike that Trump summed up as “I got him before he got me.” Jurors are instructed to ignore news pertaining to the case.
The Iranian government has denied plotting to kill Trump or other U.S. officials.
Merchant, 47, had a roughly 20-year banking career in Pakistan before getting involved in an array of businesses: clothing, car sales, banana exports, insulation imports. He openly has two families, one in Pakistan and the other in Iran – where, he said, he was introduced around the end of 2022 to a Revolutionary Guard intelligence operative. They initially spoke about getting involved in a hawala, an informal money transfer system, Merchant said.
Merchant testified that his periodic visits to the U.S. for his garment business piqued the interest of his Revolutionary Guard contact, who trained him on countersurveillance techniques.
The U.S. deems the Revolutionary Guard a “foreign terrorist organization.” Formally called the Islamic Revolutionary Guard Corps, the force has been prominent in Iran under Khamenei.
Merchant said the handler told him to seek U.S. residents interested in working for Iran. Then came another assignment: Look for a criminal to arrange protests, steal things, do some money laundering, “and maybe have somebody murdered,” Merchant recalled.
“He did not tell me exactly who it is, but he told me – he named three people: Donald Trump, Joe Biden and Nikki Haley,” he added.
In 2024, multiple sources familiar with the investigation told CBS News Merchant planned to assassinate current and former government officials across the political spectrum.
Merchant allegedly sketched out the plot on a napkin inside his New York hotel room, prosecutors said, and told the individual “that there would be ‘security all around’ the person” they were planning to kill.
“No other option”
After U.S. immigration agents pulled Merchant aside at the Houston airport in April 2024, searched his possessions and asked about his travels to Iran, he concluded that he was under surveillance. But still he researched Trump rally locations, sketched out a plot for a shooting at a political rally, lined up the supposed hit men and scrambled together $5,000 from a cousin to pay them a “token of appreciation.”
He even reported back to his Revolutionary Guard contact, sending observations – fake, Merchant said – tucked into a book that he shipped to Iran through a series of intermediaries.
Merchant said he “had no other option” than to play along because the handler had indicated that he knew who Merchant’s Iranian relatives were and where they lived.
In a court filing this week, prosecutors noted that Merchant didn’t seek out law enforcement to help with his purported predicament before he was arrested. He testified that he couldn’t turn to authorities because his handler had people watching him.
Prosecutors also said that in his FBI interviews, Merchant “neglected to mention any facts that could have supported” an argument that he acted under duress.
Merchant told jurors Wednesday that he didn’t think agents would believe his story, because their questions suggested “they think that I’m some type of super-spy.”
“And are you a super-spy?” defense lawyer Avraham Moskowitz asked.
“No,” Merchant said. “Absolutely not.”
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