Washington State Sues Albertsons Over Payout

Nov. 2, 2022
Attorney general’s lawsuit says big payment to shareholders would weaken food retailer’s ability to compete.

The attorney general of Washington state has taken Albertsons to court to prevent it from making a $4 billion payout to shareholders in advance of an acquisition by Kroger.

Bob Ferguson filed a lawsuit Nov. 1 asking for an injunction to prevent Albertsons from making the payout. Ferguson argues that the payment would soak up almost all of Albertsons’ cash and make it impossible for the company to compete independently.

Albertsons responded that it had planned the payout separately from the acquisition by Kroger, and that it would take place even if the deal does not go through.

Ferguson was one of six attorneys general who signed a letter dated Oct. 26 asking Albertsons to delay the payout until after the deal is scrutinized. Albertsons refused, prompting the lawsuit.

The proposed acquisition, announced Oct. 14, would have Kroger paying $24.6 billion for Albertsons, with the cost of the payout as part of the deal. It has drawn a great deal of criticism from lawmakers and others who claim it would cut down on competitiveness in food retailing.

UPDATE: The attorneys general of Illinois, California and the District of Columbia filed a similar suit in federal court in Washington, D.C., on Nov. 2.

About the Author

Pan Demetrakakes | Senior Editor

Pan has written about the food and beverage industry for more than 25 years. His areas of coverage have included formulations, processing, packaging, marketing and retailing. Pan worked for Food Processing Magazine for six years in the 1990s, where he was operations editor (his current role), touring dozens of food plants of every description. He has also worked for Packaging and Food & Beverage Packaging magazines, the latter as chief editor, during which he won three ASBPE awards. He is a graduate of Stanford University with a BA in communications.

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