Citing an anonymous "source close to the FTC's thinking," Kroger, Albertsons and the regulator had a previously-disclosed Jan. 17 "timing agreement" that no party would take action on the merger proposal that has now been extended.
Officials with the FTC declined to comment on the report Friday.
The delay comes after more than a year of intense scrutiny and negotiations with regulators with recent disclosures indicating the FTC wasn't sold on "the merits" of the deal.
After pushing hard for a decision by mid-December, the Cincinnati-based supermarket giant disclosed a promise with regulators not to try to close the deal before Jan. 17. But regulators were also seeking to extend that deadline as they continue to discuss the deal and Kroger's proposed concessions to mollify their concerns.
Disclosure of the behind-the-scenes wrangling between the retailers and FTC regulators at comes as the companies seek to close the deal this spring while the government agency has insisted on further review of the deal. The latest details on status of the proposed merger come from court filings in a California lawsuit brought by consumers seeking to halt the deal.
In late November, Kroger signaled it was pushing to keep its proposed takeover of its Boise, Idaho, rival on schedule for spring 2024 by disclosing a key regulatory filing. That came a few weeks after FTC Chair Lina Khan told local news media in Denver the agency might not finish its review until 2024.
What’s the latest in the regulatory review of the proposed Kroger takeover of Albertsons?
Since the deal was announced, officials with the FTC have refused to even acknowledge they are the regulator conducting the antitrust review of the merger and declined any comment regarding the supermarket merger. But Kroger regulatory filings confirm the FTC is the agency handling their proposed merger.
Kroger officals declined comment on Friday. But company executives have said they’ve worked with the agency to answer its questions and address its concerns and have expressed optimism they can close the deal early this year.
“We continue to work cooperatively with the FTC in its review of the transaction,” Kroger CEO Rodney McMullen told Wall Street analysts on a Nov. 30 conference call. “This step keeps us on track to close our proposed merger with Albertsons in early 2024.”
Kroger CEO William Rodney McMullen speaks during a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on the proposed Kroger-Albertsons grocery store merger, at the Capitol in Washington on Nov. 29, 2022.
Importantly, McMullen also disclosed during that call the company had filed “certified substantial compliance” on Nov. 15. The filing was a legal maneuver aimed to assert Kroger had answered the FTC’s questions and prompted the agency to wrap up its review by Dec. 15. But legal experts said the FTC might not agree with Kroger’s assessment and talks could continue.
Dec. 15 came and went with no update on the potential deal from the FTC, Kroger or Albertsons.
Since then, Kroger and other parties have disclosed in the California lawsuit that the grocer and the FTC have reached a “timing agreement” as talks continued. While the lawsuit was dismissed in late December, details of Kroger's discussions were revealed.
In a Dec. 8 filing, it was disclosed that Kroger would take no action regarding the merger before Jan. 17.
Six days later, court records show, the Cincinnati retailer provided another update during a hearing: “Kroger informed the court they are discussing a proposal with the FTC that would extend the timing agreement to allow the parties and the government to continue discussions with respect to both the merits and divestiture.”
The latest filing suggests regulators still aren’t sure if the deal should go through or if a $2.3 billion deal announced in September to divest stores is large enough to allay concerns about competition. It also indicated Kroger and the FTC might change the Jan. 17 deadline.
