Washington state sues to block Albertsons’ $4 bln payout to shareholders

Nov 1 (Reuters) – Washington State Legal professional Common Bob Ferguson filed a lawsuit on Tuesday to dam grocery chain Albertsons Cos Inc (ACI.N) from paying dividends to shareholders earlier than closure of its proposed merger with grocery store operator Kroger Co (KR.N).

The $4 billion payout to shareholders “dangers severely undercutting the grocery big’s capability to compete throughout the prolonged time interval authorities regulators — together with Washington — will probably be scrutinizing the merger,” in response to a press release posted to the Washington Legal professional Common’s web site.

Kroger snapped up Albertsons in a $25 billion deal final month, making a U.S. grocery behemoth to higher compete with chief Walmart Inc on costs, however was anticipated to run into antitrust roadblocks. learn extra

The AG will file a brief restraining order on Tuesday or Wednesday, which, if granted, will block Albertsons from making the cost whereas Ferguson’s lawsuit is ongoing.

“Paying out $4 billion earlier than regulators can do their job and evaluate the proposed merger will weaken Albertsons’ capability to proceed enterprise operations and compete,” Ferguson stated.

Kroger and Albertsons didn’t instantly reply to a request for touch upon the AG’s lawsuit.

Late in October, District of Columbia Legal professional Common Karl Racine stated that half-a-dozen state attorneys common are digging into Kroger deliberate acquisition of Albertsons. learn extra

Reporting by Juby Babu in Bengaluru; Enhancing by Sherry Jacob-Phillips

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