Last week, U.S. Sen. Maria Cantwell (D-WA) and U.S. Sen. Patty Murray (D-WA) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan to express concern about the pending acquisition of Albertsons Companies, Inc. by the Kroger Company, which would merge two of the largest grocery store chains in Washington state.
“Together, the 337 Albertsons and Kroger grocery stores in Washington represent 21.5 % of the state’s total. Underserved communities throughout Washington benefit from these stores and what they provide in price competition, convenience, high-quality nutritional access, and pharmacy services. Given their aggregate share of the state’s retail grocery sector, we fear that Washington is at disproportionate risk of losing stores as a result of the proposed merger,” Sen. Cantwell and Sen. Murray wrote.
In the letter, Sen. Cantwell and Sen. Murray emphasized that the merger could undercut market competition and result in store closures that force worker layoffs and create food deserts within the state. They cite the 2015 merger of Albertsons and Safeway — as a condition of that merger, the companies were required to sell 150 stores to another company that later filed for bankruptcy. Albertsons reacquired some of those stores, undercutting a key objective of preserving competition in spite of the merger. That history, the senators wrote, “does not bode well for another Albertsons merger.”
Sen. Cantwell and Sen. Murray also expressed concern over Albertsons’ recent announcement of approximately $4 billion in cash dividends to shareholders, worth nearly 20% of the company’s value.
“The cash dividend could adversely impact the ability of Albertsons to keep its stores open and its workers employed should the merger with Kroger not be approved. Specifically, we are alarmed by reports that the merger may involve selling hundreds of stores, potentially resulting in layoffs,” the senators wrote.
Kroger and Albertsons announced that the companies had entered into a merger agreement on Oct. 14. Kroger agreed to buy Albertsons for $34.10 per share, $24.6 billion total. If the merger goes through, the combined Kroger-Albertsons brand would control nearly 20% of the grocery store market nationwide.
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