Six state attorneys general have signed a letter to Kroger and Albertsons, expressing concern about an impending acquisition and asking Albertsons to hold off on a large payment to shareholders.
The attorneys general of Illinois, Arizona, California, Idaho. Washington state and the District of Columbia addressed a letter Oct. 26 to the CEOs of Kroger and Albertsons, regarding Kroger’s plan to acquire Albertsons in a $24.6 billion deal. They want to ensure that the deal “does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects.”
Their specific concern is a “special dividend” of $4 billion that Albertsons announced on Oct. 18 it would pay to shareholders on Nov. 7. The letter claims that the payment would be about one-third of Albertsons’ market capitalization, and claims that “paying a dividend of this size will hamper its ability to meaningfully compete with Kroger” before the deal.
Political opposition to the deal is heating up, with U.S. Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) writing to urge the Federal Trade Commission to disallow it. Members of a Senate subcommittee have already declared an intention to hold hearings on the transaction.