Kroger and Albertsons are ready to close their $24 billion merger. But there’s a giant obstacle in the way: an aggressive Federal Trade Commission trying to prevent antitrust violations.Back in 1883, a man named Bernard Kroger invested his life savings of $372 to open his first grocery store in Cincinnati.Meanwhile, a college student named Joe Albertson worked his way up from grocery clerk at Safeway to manager of a dozen stores. In 1939, he opened his first store in Boise.
For comparison sakes, the success of Walmart, cited as a need for the merger, has 2 million employees and 4,600 stores.And it’s not just the grocery business suffering from zealous federal regulators. In recent months the heavy hand of the FTC has come down hard on companies that subscribe to the popular merge-or-die syndrome of American business.
ExxonMobil announced it wants to buy Irving-based Pioneer Natural Resources for $59.5 billion. In a statement, Pioneer said the companies “continue to work constructively with the Federal Trade Commission in its review of the merger.” Democratic U.S. senators are applying pressure, saying the sale is harmful to consumers and anti-competitive.Capitol One announced its intention to buy Discover Financial Services in a $35.3 billion deal.
Davis is critical of regulators’ goals of “creating a new kind of business landscape that, to put it bluntly, suits their taste. Even if there’s really no harm to consumers, the FTC is happy to bring an antitrust lawsuit.” Attorneys general in eight states and the District of Columbia have joined the suit to stop the deal. Texas is not one of them.In court papers, Albertsons argues it is bedeviled by competition from Walmart, Target, Costco, Amazon/Whole Foods, Trader Joe’s and Sprouts.
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