The proposed $24.6 billion merger between Kroger (KR) and Albertsons (ACI), which is the biggest supermarket deal in U.S. history, has taken a new turn. Kroger has filed a lawsuit against the Federal Trade Commission (FTC), seeking to block the regulator from reviewing the deal.
Importantly, a federal court hearing on this matter is scheduled for August 26 in the District of Oregon.
Kroger’s Objections
In its legal filing, Kroger argues that the FTC’s administrative process infringes on constitutional principles. The company argues that the administrative law judge handling the case has undue job security, as they cannot be directly removed by the U.S. President.
Additionally, KR said that the FTC is overreaching by trying to block a private business contract through its administrative channels.
KR-ACI Deal Witnesses Multiple Hurdles
The Kroger-Albertsons merger faces a complex legal landscape over concerns that the deal will hurt consumers by limiting competition and stifling wage growth. In addition to the FTC’s investigation, the merger’s legal battles include a federal lawsuit challenging the deal in Oregon and state lawsuits in Colorado and Washington.
Currently, the deal has been put on hold awaiting the outcome of the Colorado antitrust lawsuit.
Nevertheless, Kroger and Albertsons have emphasized the potential benefits of the merger, including lower prices for consumers and job security for union workers.
Is Kroger a Good Stock to Buy?
On TipRanks, KR has a Moderate Buy consensus rating based on seven Buy and five Hold ratings assigned by analysts in the past three months. The analysts’ average price target on Kroger stock of $58.80 implies 11.45% upside potential. Shares of the company have gained 10.5% in the past six months.
