California Attorney General Rob Bonta and his peers in several other states demanded Wednesday that Albertsons Cos. delay paying a $4-billion dividend to investors until after the company's merger with rival supermarket chain Kroger Co. is reviewed by the Federal Trade Commission.
This month, Kroger disclosed its $20-billion bid to buy Albertsons — a deal that would combine several chains with a presence in Southern California, among them Ralphs, Pavilions and Vons. As part of the Oct. 14 announcement, Cincinnati-based Kroger said that Albertsons would pay a special cash dividend of up to $4 billion to shareholders of record Oct. 24. It is scheduled to be payable Nov. 7.
The potential combination of the two chains comes as food costs have soared amid rising inflation. The merger has drawn intense criticism, including from United Food and Commercial Workers Local 770 in Los Angeles, which represents 20,000-plus members. On Saturday, Local 770 issued a statement opposing the dividend and calling on elected officials and regulators to halt Albertsons' payment, which it said would result in the "devaluation of the company at a time when consumers are facing crushing inflation."
