Kroger And Albertsons – Combining to Inch Closer to Walmart
In October, Kroger, one of the nation’s biggest leading grocery retailers, announced its $24.6 billion bid to acquire Albertsons, inching closer as the second-largest grocer behind Walmart. This past Tuesday, the CEOs defended their positions and justifications for the merger at a congressional hearing questioning the potential monopolistic nature of the deal. Washington voices asked important questions on the future of the competitive landscape, and whether this merger could affect the control of prices for the grocery industry. As inflation has already wreaked havoc on food prices across all grocery stores, both leaders for Kroger and Albertsons stated their claims as to why this acquisition would not risk making the pains for consumers even worse.
Before the news of the acquisition by Kroger, Kroger held second in grocer market share, with Albertsons at fourth behind Costco. Now, the conglomerate would be a far closer second to Walmart, both combined with Walmart holding an almost 37% market share in the total U.S. grocery market. In fears of a harmed competitive environment, Kroger and Albertsons will most likely be forced to sell a decided number of stores before approval by the FTC. Consequently, such deliberations from antitrust officials to ensure the proposed deal doesn’t promote anticompetitive practices may take up to two years to be decided, thus making the merger set to be closed by early 2024.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
