A judge has blocked the $25 billion U.S. takeover of American grocery store chain Albertsons (ACI) by rival Kroger (KR), citing competition concerns.
The judge in the case sided with an earlier ruling by the U.S. Federal Trade Commission (FTC) that said the acquisition of Albertsons would lead to less competition in the grocery sector.
Specifically, the FTC argued that the merger would eliminate competition between the top two traditional grocery chains in America, leading to higher prices for consumers.
Kroger refuted the competition worries, saying the deal would lower prices, particularly at Albertsons stores, where it said prices are 10% higher, on average, than at Kroger outlets.
The two companies had also argued that they need to merge to better compete with much larger rivals such as Walmart (WMT) and Amazon (AMZN).
U.S. District Judge Adrienne Nelson rejected those argumentd and has now blocked the purchase of Albertsons from proceeding.
Had the deal been approved, Kroger would own approximately 5,000 stores across the U.S.
Kroger and Albertsons had offered to sell nearly 600 stores, mostly in western U.S. states, to help preserve competition.
Grocery workers’ unions came out against the merger, saying it would likely lead to job losses, and 10 U.S. states and the District of Columbia sued to block the deal.
The stock of Kroger has risen 31% this year and currently trades at $60.73 U.S. per share.
Albertsons’ stock has fallen nearly 20% on the year to trade at $18.51 U.S. a share.