Albertsons Demands More Than $9.3 Billion From Kroger Over Failed $24.6 Billion Grocery Merger

Albertsons went to Delaware Chancery Court on Monday demanding more than $9.3 billion from Kroger, arguing that Kroger willfully broke the merger agreement behind the failed $24.6 billion grocery deal by failing to use its best efforts to win regulatory approval. Kroger answered the same day that the claim is fatally flawed and that it kept its end of the bargain.

The demand, presented by Albertsons' lawyers on Monday, totals more than $9.3 billion, according to Bloomberg Law. It combines the premium Albertsons stockholders would have received had the deal closed with a $600 million termination fee and $75 million in interest and additional costs. The Wall Street Journal framed the same filing as a demand for at least $8 billion, counting the lost premiums and interest together with the $600 million fee. The two totals group the same components differently.

The allegation: best efforts, refused

Albertsons is asking Judge Lori Will to find that Kroger breached the merger agreement willfully. Under the agreement, Albertsons says, Kroger committed to remove any antitrust impediment to closing, with a single limit: it did not have to divest more than 650 stores. Albertsons calls those maximalist commitments and argues Kroger wanted the merger only on its own terms.

The filing accuses Kroger of running an inflexible, lowball divestiture strategy and refusing to alter its plan despite feedback from regulators, its own antitrust counsel and economists, Albertsons, and the designated buyer, C&S Wholesale Grocers. As texture for that claim, the Journal reported that then-Albertsons chief executive Vivek Sankaran offered an $800 million price cut in 2024 if Kroger agreed to divest more stores, and that Kroger's then-chief executive Rodney McMullen allegedly never took the offer to Kroger's board. The filing also points to a $400 million executive bonus pool tied to profit targets after closing — an allegation about incentives, not a finding.

Kroger's answer: 'fatally flawed'

Kroger's own filing on Monday called Albertsons' arguments fatally flawed. Kroger says it kept its end of the bargain, spent more than $1 billion pursuing the deal, and relied on antitrust counsel — and that nothing more it could have done would have won approval, because approval would have required divesting far more than the 650-store limit.

Kroger also argues Albertsons is not entitled to a termination fee because Albertsons failed its own obligations under the agreement. In the sharpest countercharge, Kroger accuses Albertsons of secretly working with C&S to push regulators to demand more divestitures; C&S says its communications with regulators met its contractual, legal and ethical obligations. Kroger warned the court that crediting Albertsons' second-guessing would make merger risk-sharing nearly impossible for companies to negotiate in future deals.

Albertsons said in a statement that Kroger made a promise and broke it, that Kroger should be held accountable, and that it looks forward to proving its case at trial.

The deal the courts stopped

The fight is over the largest grocery merger ever attempted in the United States. Kroger agreed in 2022 to buy Albertsons in a deal valued at $24.6 billion. A federal court blocked the merger in December 2024 after a challenge by the Federal Trade Commission, ruling the plan to divest stores to C&S insufficient to preserve competition. Albertsons terminated the agreement and sued Kroger the day after the ruling, according to the Journal.

The Delaware case, Albertsons v. Kroger, No. 2024-1276, now goes to a bench trial before Judge Will starting October 19. The trial is expected to last about two weeks. Cerberus Capital Management, Albertsons' largest shareholder with a stake above 30% at the end of June, looms over the outcome: Albertsons shares are down about 30% over the past 12 months and the company's market value is roughly $6 billion, according to the Journal. Both grocers have absorbed about $1 billion each in deal-related costs.

Kroger's second headline: 3,000 corporate jobs

Kroger made news of its own on Monday. In an internal memo obtained by the Cincinnati Enquirer, chief executive Greg Foran said the company plans to cut 3,000 corporate jobs over three years — more than a third of its roughly 8,200 corporate staff. Reuters also reported the planned cuts on Monday, citing Bloomberg News.

Foran's memo described a leaner, more focused company with fewer layers, fewer handoffs and less overhead, using new technology including artificial intelligence to do more with fewer people, with the savings reinvested in frontline associates. Details are to be communicated in the coming months. The cuts will fall disproportionately on the company's Cincinnati headquarters and its hubs in Charlotte, North Carolina, and Portland, Oregon, and they follow more than 1,000 corporate job cuts last year. Kroger employs about 403,000 people across roughly 2,700 stores.

What to watch next

The trial starting October 19 is the event that matters: whether Judge Will finds a willful breach, and whether any damages approach the $9.3 billion Albertsons is demanding, will set the terms for how merger partners allocate regulatory risk. A damages award anywhere near the demand would rewrite how future merger partners price the risk that regulators say no. Leadership has turned over at both companies since the deal died — Susan Morris now leads Albertsons, succeeding Sankaran, and Greg Foran has led Kroger since February 2026, after McMullen left in March 2025. For Kroger staff, the other date to watch is the rollout of the corporate job cuts, with details promised in the coming months.

A note on sourcing: the damages demand, the breach allegation and Kroger's response are drawn from full reads of the Monday court coverage by Bloomberg Law and the Wall Street Journal, which group the components of the demand differently and are attributed separately above. The corporate job cuts rest on the Cincinnati Enquirer's read of Foran's internal memo and a same-day Reuters wire report. Claims drawn from the companies' court filings are allegations and arguments, not findings; the trial has not begun.