🛒 Kroger-Albertsons Merger: National Impact

[CalItalian]

Aldi, Save Mart may have tried to buy Colorado stores in Kroger merger divestiture sale

https://denvergazette.com/news/business ... e_vignette

[storewanderer]

Aldi, Save Mart may have tried to buy Colorado stores in Kroger merger divestiture sale

https://denvergazette.com/news/business ... e_vignette

Aldi sure is a thick faced outfit to think they'd even be taken seriously as a bidder. Limited assortment format, non-union, doesn't run pharmacies, doesn't run gas stations... REALLY? I suppose they'd say they will operate everything and honor union agreements as long as the stores continue as Safeway/Albertsons or whatever banner they agreed to license. Let's regroup in a few years and ask the Winn Dixie people how things are going to see how that sort of thing plays out.

This CO testimony is very interesting however I think Kroger may win in Colorado.

The other interesting piece that is coming out of CO testimony is they call Kroger out for having higher priced mountain stores designated as "no comp" stores where they are the only store in town. What I'd like to see is an analysis of Kroger's pricing in these "no comp" stores and Safeway pricing in a remote stores in the mountains where Safeway is "the only store in town." Without seeing that, it is questionable if this "no comp" thing is really an issue or not.

[ClownLoach]

Aldi, Save Mart may have tried to buy Colorado stores in Kroger merger divestiture sale

https://denvergazette.com/news/business ... e_vignette

Aldi sure is a thick faced outfit to think they'd even be taken seriously as a bidder. Limited assortment format, non-union, doesn't run pharmacies, doesn't run gas stations... REALLY? I suppose they'd say they will operate everything and honor union agreements as long as the stores continue as Safeway/Albertsons or whatever banner they agreed to license. Let's regroup in a few years and ask the Winn Dixie people how things are going to see how that sort of thing plays out.

This CO testimony is very interesting however I think Kroger may win in Colorado.

The other interesting piece that is coming out of CO testimony is they call Kroger out for having higher priced mountain stores designated as "no comp" stores where they are the only store in town. What I'd like to see is an analysis of Kroger's pricing in these "no comp" stores and Safeway pricing in a remote stores in the mountains where Safeway is "the only store in town." Without seeing that, it is questionable if this "no comp" thing is really an issue or not.

Who cares?

There were nearly a hundred buyers. I'm sure everyone but Fresh & Easy bid. Maybe even Tesco.

Remember that companies bid low for divestitures unless they're really serious about them. The bidding war stops when someone gets close to worst case scenario asset liquidation value.

Someone must have bid up C&S since they're paying more than the stores are worth closed. That would not be Aldi or Save Mart. I'd really love to know who it was, and I hope we find out before all this is over. A surprise operator like HyVee maybe?

Many divestitures have been a dollar a store. If you were say Raley's and you had a chance to get a hundred Colorado stores for a few dollars a piece wouldn't you throw in your hat and consider growing out your chain there?

And Aldi specifically is delusional so of course they bid. They honestly believe they will grow to over 10,000 stores in the US or more and wipe out every chain except Walmart and Costco. All with piss poor little drugstore size boxes with maybe a thousand SKUs. They're going to keep bidding every single time anything comes available. They probably bid on Rite Aid but their own bankers made a superior offer. I am 100% sure that Aldi would buy any grocery chain anywhere, successful or not and then screw it all up. They seem to have unlimited funds and don't care if they buy stores that currently do a million a week and they take them down to a hundred thousand a week. That's exactly what they're going to do with Winn Dixie. They seem to be following the CVS model and what they did to all the SavOn and Osco drugstores they acquired where they wore negative 70% comps like a gold medal for years until the core business had been vaporized.

I wonder how little C&S paid for the previous chains they didn't give a crap about? Probably bought those for a hundred bucks a store or so.

[ClownLoach]

Kroger has finished laying out their case in the Seattle court. Still no judgment from the judge in the Federal case in Oregon.

Kroger has also extended their deadline on the debt exchange which would be done in the merger. Note that the Albertsons debt has now dipped down to $7.44B, just the last quarterly earnings release it was still over $8B. There is zero legitimate argument that debt is any threat to the viability of Albertsons as a company despite the bogus arguments in the court, where apparently there is no penalty for stretching the truth.

Kroger continues to state that they expect the merger will close before the end of the calendar year. I have to wonder if they would try to pull the trigger and close the merger if they get a favorable judgment in Portland even though they're on trial in Washington and Colorado. That would put those courts into a situation of trying to unravel the merger locally with their litigation instead of preventing it. Better to beg forgiveness than ask permission? The courts would probably be pissed, but if the Feds don't stop it then that becomes an argument against the states. What a mess.

https://progressivegrocer.com/kroger-co ... se-seattle

https://www.investing.com/news/company- ... CH-3652992

[ClownLoach]

I should have mentioned that the story about the Seattle trial said they now promise to lower prices in Washington state by $100M.

They also said that all the lawyers are flying from courthouse to courthouse because of all of the different cases.

I wonder how much they could lower prices if they weren't paying for all these lawyers and drop the whole thing?

[HCal]

Kroger continues to state that they expect the merger will close before the end of the calendar year. I have to wonder if they would try to pull the trigger and close the merger if they get a favorable judgment in Portland even though they're on trial in Washington and Colorado. That would put those courts into a situation of trying to unravel the merger locally with their litigation instead of preventing it. Better to beg forgiveness than ask permission? The courts would probably be pissed, but if the Feds don't stop it then that becomes an argument against the states. What a mess.

They are not going to close the merger if there is any active injunction against it. You can't just ignore the law and get away with it when it comes to something like this. If the cases are pending but there is no injunction, then they can theoretically close the merger, but they run the risk of being forced to unravel it later if they lose.

Each case is independent, and is based on different laws. What happens in the federal case doesn't affect the state cases at all. I don't know about Colorado or Washington in particular, but for example California has its own antitrust statute which is known to be stronger than the federal laws in many respects.

[ClownLoach]

Kroger continues to state that they expect the merger will close before the end of the calendar year. I have to wonder if they would try to pull the trigger and close the merger if they get a favorable judgment in Portland even though they're on trial in Washington and Colorado. That would put those courts into a situation of trying to unravel the merger locally with their litigation instead of preventing it. Better to beg forgiveness than ask permission? The courts would probably be pissed, but if the Feds don't stop it then that becomes an argument against the states. What a mess.

They are not going to close the merger if there is any active injunction against it. You can't just ignore the law and get away with it when it comes to something like this. If the cases are pending but there is no injunction, then they can theoretically close the merger, but they run the risk of being forced to unravel it later if they lose.

Each case is independent, and is based on different laws. What happens in the federal case doesn't affect the state cases at all. I don't know about Colorado or Washington in particular, but for example California has its own antitrust statute which is known to be stronger than the federal laws in many respects.

Assuming that they are like other corporations that run separate subsidiaries internally, and the fact that they voluntarily accepted a temporary injunction... I do wonder if they could manipulate the process. I wonder if the court of appeals allows the reversal of voluntary acceptance.

I find it exceptionally odd that they came out and announced two times this month that this merger will close before Dec. 31, 2024, and also extended the debt offer. In fact I am unsure why they even make any statement that they will close the merger on any time line knowing they're under a temporary injunction.

Makes me wonder if they would play some kind of ridiculous game with the rest of the operations outside of Colorado. Process it as an asset sale of everything but Colorado property. Like you said, the state courts weigh differently. Furthermore, that injunction should have halted all activities but that didn't happen at all. The only thing that was halted was activity within Colorado, and that's because they know the state has no power outside their borders. They issued those press releases stating they halted merger activities that weren't worth the electrons used to email them. A week later it was back to normal. And that makes me wonder what kind of power the state level court really has to punish the companies if they blow off the injunction. My guess is levy fines that they would be happy to pay.

I already have brought up California who obviously is bought and paid for at this point. As stated if they filed a suit this merger would be called off 5 minutes later. The CA court would rubber stamp an injunction and then say come see us in a couple of years for the initial pre-hearing. As you said CA has strong laws for antitrust but that is because they like to pretend they're like an independent country. Many other states don't write such laws and leave it to the feds or interpretation of federal law at the state level. I don't trust that these two companies won't play games at the state level if they feel emboldened by the Fed case should it turn out in their favor. Play the old Humpty Dumpty game and say it's done and they can't put the old separate companies together again.

Not sure why anyone would trust these guys would follow the law unless they faced real punishments. They obviously feel fine lying in court.

The argument being made at all levels is that in effect once this merger happens it's pretty much impossible to hold them accountable to anything.

[storewanderer]

Assuming that they are like other corporations that run separate subsidiaries internally, and the fact that they voluntarily accepted a temporary injunction... I do wonder if they could manipulate the process. I wonder if the court of appeals allows the reversal of voluntary acceptance.

I find it exceptionally odd that they came out and announced two times this month that this merger will close before Dec. 31, 2024, and also extended the debt offer. In fact I am unsure why they even make any statement that they will close the merger on any time line knowing they're under a temporary injunction.

Makes me wonder if they would play some kind of ridiculous game with the rest of the operations outside of Colorado. Process it as an asset sale of everything but Colorado property. Like you said, the state courts weigh differently. Furthermore, that injunction should have halted all activities but that didn't happen at all. The only thing that was halted was activity within Colorado, and that's because they know the state has no power outside their borders. They issued those press releases stating they halted merger activities that weren't worth the electrons used to email them. A week later it was back to normal. And that makes me wonder what kind of power the state level court really has to punish the companies if they blow off the injunction. My guess is levy fines that they would be happy to pay.

I already have brought up California who obviously is bought and paid for at this point. As stated if they filed a suit this merger would be called off 5 minutes later. The CA court would rubber stamp an injunction and then say come see us in a couple of years for the initial pre-hearing. As you said CA has strong laws for antitrust but that is because they like to pretend they're like an independent country. Many other states don't write such laws and leave it to the feds or interpretation of federal law at the state level. I don't trust that these two companies won't play games at the state level if they feel emboldened by the Fed case should it turn out in their favor. Play the old Humpty Dumpty game and say it's done and they can't put the old separate companies together again.

Not sure why anyone would trust these guys would follow the law unless they faced real punishments. They obviously feel fine lying in court.

The argument being made at all levels is that in effect once this merger happens it's pretty much impossible to hold them accountable to anything.

My memory may be off but I think Alpha Beta merged with Lucky before FTC approval and the ultimate resolution was that divest of all SoCal Alpha Beta except for San Diego to Burkle so they got to keep San Diego and Bay Area Alpha Betas basically. Alpha Beta had previously left Sacramento/Central California on its own with Fleming assuming various of the stores and turning them over to independents (even in places like Fresno where Lucky had no presence).

I do not know why CA ha$ not done more to $top thi$ merger, or even push for more divests, but it is what it is. Maybe they will surprise us but the clock is running and I am losing hope.

I also am not sure CO is doing that great of a job trying to sell the agenda that C&S is another Haggen. I couldn't really sell that agenda either, it is false. I really wish I could sell that agenda but at this point with the plans C&S has presented I can't. And with as weak as Safeway already is in CO, I am not sure C&S can do much worse. This will also add another supplier option for independent stores in CO and surrounding states which could be helpful to those independents.

[pseudo3d]

Kroger continues to state that they expect the merger will close before the end of the calendar year.

Kroger will try to hold on as long as it can. Remember, they were planning to wrap things up by January of this year. That didn't happen.

[ClownLoach]

Assuming that they are like other corporations that run separate subsidiaries internally, and the fact that they voluntarily accepted a temporary injunction... I do wonder if they could manipulate the process. I wonder if the court of appeals allows the reversal of voluntary acceptance.

I find it exceptionally odd that they came out and announced two times this month that this merger will close before Dec. 31, 2024, and also extended the debt offer. In fact I am unsure why they even make any statement that they will close the merger on any time line knowing they're under a temporary injunction.

Makes me wonder if they would play some kind of ridiculous game with the rest of the operations outside of Colorado. Process it as an asset sale of everything but Colorado property. Like you said, the state courts weigh differently. Furthermore, that injunction should have halted all activities but that didn't happen at all. The only thing that was halted was activity within Colorado, and that's because they know the state has no power outside their borders. They issued those press releases stating they halted merger activities that weren't worth the electrons used to email them. A week later it was back to normal. And that makes me wonder what kind of power the state level court really has to punish the companies if they blow off the injunction. My guess is levy fines that they would be happy to pay.

I already have brought up California who obviously is bought and paid for at this point. As stated if they filed a suit this merger would be called off 5 minutes later. The CA court would rubber stamp an injunction and then say come see us in a couple of years for the initial pre-hearing. As you said CA has strong laws for antitrust but that is because they like to pretend they're like an independent country. Many other states don't write such laws and leave it to the feds or interpretation of federal law at the state level. I don't trust that these two companies won't play games at the state level if they feel emboldened by the Fed case should it turn out in their favor. Play the old Humpty Dumpty game and say it's done and they can't put the old separate companies together again.

Not sure why anyone would trust these guys would follow the law unless they faced real punishments. They obviously feel fine lying in court.

The argument being made at all levels is that in effect once this merger happens it's pretty much impossible to hold them accountable to anything.

My memory may be off but I think Alpha Beta merged with Lucky before FTC approval and the ultimate resolution was that divest of all SoCal Alpha Beta except for San Diego to Burkle so they got to keep San Diego and Bay Area Alpha Betas basically. Alpha Beta had previously left Sacramento/Central California on its own with Fleming assuming various of the stores and turning them over to independents (even in places like Fresno where Lucky had no presence).

I do not know why CA ha$ not done more to $top thi$ merger, or even push for more divests, but it is what it is. Maybe they will surprise us but the clock is running and I am losing hope.

I also am not sure CO is doing that great of a job trying to sell the agenda that C&S is another Haggen. I couldn't really sell that agenda either, it is false. I really wish I could sell that agenda but at this point with the plans C&S has presented I can't. And with as weak as Safeway already is in CO, I am not sure C&S can do much worse. This will also add another supplier option for independent stores in CO and surrounding states which could be helpful to those independents.

And the FTC made them sell Alpha-Beta. If they are not blocked by the FTC, something that worries me daily as it continues to take longer for this verdict to arrive that was "in the bag," then I have to question if any state level punishment will really have teeth.

I do not know why they suddenly are issuing new advisory to investors with updated merger close dates. They would only do so if they know something new that we don't, and that worries me.

When comparing articles about the Colorado prosecution versus the more experienced FTC, it is obvious the state is in over their head. Heck, the testimony in the FTC case from both sides shaves down their arguments. Kroger will win the Colorado case because of ineffective prosecution, if not in the courtroom it will be overturned on appeal. Too much bombastic language which I've already discussed is seen by higher courts as illegal bias. The weird issue with the release of all the confidential bidding information by the state's witness is a problem too, to the point where the judge had to intervene multiple times. I forgot that has to be kept sealed, that is a SEC regulation because it can affect stock prices of companies involved. I was reminded of that reading some of the Big Lots bankruptcy filings last night, even in that kind of case where we get more transparency than normal the bid process for individual assets like store sites is sealed until accepted.

I also think if they win their case, Kroger will remove many of the divestitures from the Colorado list. They surely don't want to only keep ten or so stores, they would want to keep more.

I think if a state winds up actually blocking this, it's going to be Washington.