LOS ANGELES (CNS) – California Attorney General Rob Bonta and two other attorneys general Wednesday asked a federal court to temporarily block Albertsons’ planned $4 billion payment of a special dividend to shareholders Monday amid concerns that the payment would hamper the company’s ability to compete.
The complaint follows a letter sent to Albertsons and Kroger last week arguing that the planned payout is premature and would substantially deplete Albertsons’ cash flow as inflation drives up prices and an economic downturn appears imminent. The attorneys general seek to delay the payout while regulatory review of the proposed merger of the two supermarket chains is ongoing.
“Albertsons and Kroger are the second and third largest grocery chains in the U.S., with nearly 5,000 stores between them, including hundreds in California,” Bonta said in a statement.
“As inflation drives up grocery prices, a decrease in competition has the potential to be devastating for hardworking California families and for those who work at these stores. This proposed merger is far from a done deal, making Albertsons’ decision to give away one-third of its market cap very concerning. I urge the court to delay this payout to allow for a thorough consideration of its impacts on Albertsons’ ability to compete while the proposed merger is under review.”
Albertsons and Kroger supply daily necessities to millions of people throughout the United States and employ more than 700,000 workers in communities across the country. Bonta said the state attorneys general are dedicated to ensuring that the proposed merger of these grocery behemoths complies with federal and state antitrust law and does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects.
