A state court in Washington has issued a preliminary injunction preventing Albertsons from making a $4 billion payout to its shareholders.
State court commissioner Henry Judson issued the order in response to a lawsuit from Washington state attorney general Bob Ferguson. Albertsons had announced the payout just after news broke of its proposed $24.6 billion acquisition by Kroger.
The lawsuit had argued that a payout that large would impede Albertsons’ ability to compete, making the deal inevitable. Judson agreed, writing, “By eliminating its cash-on-hand and nearly doubling its debt, Albertsons will be in a weakened competitive position relative to Kroger, thereby harming grocery consumers and workers throughout Washington."
The Kroger-Albertsons deal has drawn criticism that combining America’s No. 1 and 2 pure-play grocers would reduce competition in grocery retailing throughout the country. Three other attorneys general have filed lawsuits similar to Washington’s, seeking to stop Albertson’s payout.
The next hearing on the case is scheduled for Nov. 10.
