WASHINGTON (Reuters) – Top executives at Kroger Co and Albertsons Companies Inc are expected to face tough questions on Tuesday from lawmakers who worry the grocers’ planned $25 billion merger will push up food prices at a time when inflation is a concern.
Kroger Chief Executive Rodney McMullen and Albertsons’ chief, Vivek Sankaran, will go before the Senate Judiciary Committee’s antitrust panel, some of whose members have already criticized the deal.
Senators Amy Klobuchar, chair of the Senate antitrust panel, and Richard Blumenthal were among those who signed a letter to Federal Trade Commission Chair Lina Khan, saying the merger “raises considerable antitrust concerns.”
The companies, knowing the deal would be controversial and that antitrust enforcement has become tougher, offered an aggressive plan aimed at resolving concerns when they announced the deal, which would bring nearly 5,000 stores under one corporate umbrella, ranging from Safeway to Ralphs and Fred Meyer.
The companies have said they expect to sell between 100 and 375 stores to allay government concerns. Ideally, they would like to find buyers for the facilities but could also put them into a new company that would be owned by Albertsons’ shareholders. UBS has said it believes the plan will satisfy antitrust enforcers.
This plan could force the FTC, which is probing the deal to make sure it is legal under antitrust law, to not only prove in court that the transaction is illegal but that the proposed remedy is inadequate.
Walmart dominates the U.S. grocery market.
The companies may also draw fire on Tuesday for a widely criticized plan to give Albertsons’ shareholders a $4 billion dividend payment. A Washington state court put that plan on hold with the next hearing set for Dec. 9. Separately, the attorneys general of Washington, D.C., California and Illinois have also sued to stop that payment, arguing it would weaken the company’s ability to compete.
(Reporting by Diane Bartz in Washington; Editing by Matthew Lewis)
