Key Takeaways
- Shares of Kroger rose Tuesday on the news that a federal court blocked its planned merger with Albertsons.
- The deal would have made the combined companies one of the biggest grocery chains around.
- The companies had argued that the combination would help them better compete with Walmart and other retailers, while regulators were concerned about its effect on consumers.
Shares of grocer Kroger (KR) finished Tuesday higher, rising in afternoon trading on the news that a court blocked its planned merger with Albertsons (ACI).
Kroger’s stock finished the day up more than 5%, while Albertsons was off more than 2%. A federal judge blocked the deal, The Wall Street Journal and other media outlets reported, agreeing with regulators who argued that it would hurt consumers by reducing competition in the grocery market.
The proposed deal, announced in 2022, would’ve created a grocery giant even after the divestments the companies had planned in a bid to ease regulators’ concerns. The companies had argued that the deal would help the combined chain better compete against Walmart (WMT) and other retailers.
Court proceedings in the matter could continue, the Journal reported, though the companies may now choose to stop pursuing the deal.
Kroger earlier this month turned in quarterly revenue and net income below analysts’ projections.
Shares of Kroger are up roughly 30% this year, while Albertsons are off some 20%.
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