Albertsons announced Wednesday it is pulling out of its plans to merge with Cincinnati-based Kroger, citing two court rulings on Tuesday barring the transaction.
Also, it disclosed it's suing Kroger "for billions" for botching the deal and dooming the companies' bid for regulatory approval.
“Given the recent federal and state court decisions to block our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement. We are deeply disappointed in the courts’ decisions," Albertsons CEO Vivek Sankaran said in a statement.
Albertson's demands $600M termination fee
Antitrust experts said the two court orders blocking the deal posed huge roadblocks to the merger proposal that could delay it at least a year and possibly doom it forever.
On Wednesday, Albertsons blamed Kroger for not trying harder to appease wary regulators and therefore breaching its merger agreement to act in good faith. It also wanted the $600 million "break" or termination fee that Kroger agreed to pay in the event either company called off the deal.
"Kroger’s failure to exercise “best efforts” and to take “any and all actions” to secure regulatory approval of the companies’ agreed merger transaction, as was required of Kroger under the terms of the merger agreement," Albertsons said, adding its former suitor "repeatedly refusing to divest assets necessary for antitrust approval, ignoring regulators’ feedback, rejecting stronger divestiture buyers and failing to cooperate with Albertsons."
Albertsons said the result was a failed deal that cost its shareholders big time:
"Albertsons is seeking billions of dollars in damages from Kroger to make Albertsons and its shareholders whole."
Kroger: Albertson's claims are 'baseless'
On Wednesday, Kroger said Albertsons' "claims are baseless and without merit" - and accused the Boise, Idaho-based grocer of "repeated intentional material breaches and interference throughout the merger process."
Kroger added Albertsons was "not entitled" to the termination fee and "looks forward to responding to these baseless claims in court."
"This is clearly an attempt to deflect responsibility following Kroger’s written notification of Albertsons’ multiple breaches of the agreement, and to seek payment of the merger’s break fee, to which they are not entitled," Kroger said. "We went to extraordinary lengths to uphold the merger agreement throughout the entirety of the regulatory process."
This story has been updated to add video.
This article originally appeared on Cincinnati Enquirer: Albertsons pulls out of merger with Kroger