Grocery stores Kroger Co. and Albertsons Companies Inc. plan to sell 413 stores to C&S Wholesale Grocers for $1.9 billion in cash in an attempt to win antitrust approval from the Federal Trade Commission for their $24.6 billion merger, which the companies say is on track for an early 2024 close.
Weil, Gotshal & Manges LLP and Arnold & Porter Kaye Scholer LLP served as legal counsel to Kroger.
White & Case LLP and Debevoise & Plimpton LLP served as antitrust legal counsel to Albertsons Cos. Jenner & Block LLP served as corporate legal counsel.
Sullivan & Cromwell represented C&S.
The companies announced intentions to make store divestitures to obtain regulatory clearance from the FTC in October. At the time, the companies planned to establish a subsidiary of between 100 and 375 stores, SpinCo, which would be spun off to Albertsons shareholders and operate as a separate public company to create a competitor. The divestiture plan with C&S replaces that plan.
The FTC has recently challenged high-profile deals, under Chairman Lina Khan. It recently, for example, sought to block Microsoft’s acquisition of gamemaker Activision for $69 billion.
Kroger may require C&S to buy 237 more stores, to bring the total number of sold stores up to 650, the number Kroger defined as its ceiling for store divestitures. A bulk of the stores to be sold are in the West and Midwest.
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