Illinois Attorney General Kwame Raoul has sued grocery giants Kroger and Albertsons, which announced in October they plan to merge, over a nearly $4 billion payment scheduled to go out to Albertsons shareholders in November.
Kroger, which owns Mariano’s, said in October that it planned to acquire Albertsons, which owns Jewel-Osco, for $20 billion. Because of the scale of the merger and the high degree of overlap between Albertsons- and Kroger-owned stores in some areas of the country, including in Chicago, the deal stands to undergo heavy scrutiny from federal regulators. Last week, Raoul joined a group of six attorneys general who signed a letter asking Albertsons to hold off on paying out the dividend, which is scheduled for Nov. 7.
The lawsuit, which was filed jointly by Raoul and the attorneys general of Washington, D.C., and California on Wednesday, alleges the planned dividend would violate state and federal antitrust laws by leaving Albertsons cash-strapped, therefore impairing its ability to compete with other grocery companies, including Kroger. The lawsuit seeks to prevent Albertsons from paying out the dividend until the attorneys general have completed antitrust regulatory review of the merger.
