Mike Scarcella
(Reuters) – Colorado’s attorney general filed a lawsuit on Wednesday seeking to block Kroger’s (NYSE:) $25 billion bid to acquire rival supermarket chain Albertsons (NYSE:), saying it would harm consumers because the U.S. Federal Trade Commission and other States continue to carefully study the deal.
Attorney General Phil Weiser said in a statement that the proposed deal, first announced in 2022, “would result in store closures, higher prices, job losses, poorer customer service and less resilient supply chains.”
Kroger and Albertsons are Colorado’s two largest grocery chains, Weiser’s office said. Kroger operates 148 King Soopers and City Market stores, and Albertsons operates 105 Safeway and Albertsons stores in the state.
The companies defended the proposed deal as pro-competitive, saying in a statement that they were “disappointed by Attorney General Weiser’s premature decision to file the lawsuit while the merger is still under review by the Federal Trade Commission.”
The companies said they “will vigorously defend this in court” and said they are “in active dialogue” with the Federal Trade Commission and unnamed state attorneys general.
The Colorado lawsuit, filed in state court in Denver, is the second filed by the state attorney general challenging the merger.
The Washington state attorney general filed a lawsuit in January over the deal. In October, the California Attorney General’s Office said it was reviewing whether the deal violated competition law but took no action.
Colorado’s lawsuit also challenges illegal agreements restricting hiring between Kroger and Albertsons.
Kroger has proposed selling more than 400 stores and eight distribution centers to C&S Wholesale Grocers to allay antitrust concerns about the deal.
In January, Kroger and Albertsons said they were delaying expected closures until later in the year.
In December, a US federal judge dismissed a consumer class action in California court challenging the deal.