Kroger and Albertsons: the food fight every dealmaker should be watching

When two large companies agree to merge, they typically promise to use “reasonable best efforts” to win regulatory approval.

In plain English that means, “we’ll try.” But when supermarket giant Kroger agreed to acquire Albertsons for $24.6 billion in 2022, a pledge to try was not enough.

In a form of commitment that amounts to what the lawyers call “hell or high water,” Kroger agreed to take “any and all actions” necessary to win approval.

That is a big burden, which was understandably interpreted by Albertsons as a clear signal that Kroger was committed to honoring its contract and was all in on the deal.

Then the high water arrived.

In December 2024, on the same day, a federal judge in Oregon granted the Federal Trade Commission’s request to block the merger and a state judge in Seattle did the same in a suit brought by Washington’s Attorney General.

Albertsons terminated the deal and sued Kroger the next day.

I can only assume the Albertsons team was dumbstruck to discover that, when the water rose, Kroger bailed.

This week, the Delaware Court of Chancery began hearing from the formidable legal teams both grocery giants have fielded, and will ultimately have to decide whether Kroger did indeed do everything it could to honor its contract.

Both sides’ pre-trial briefings show the roadmaps they will each follow over the course of the two-week trial to make their respective cases.

Quite frankly, based on those detailed documents, it does not look good for team Kroger.

If Albertsons succeeds, the resulting damage award Kroger must pay could prove to be significant.

According to the plaintiff’s calculations, an award could be more than $8 billion – which is ironic considering Albertsons will argue that Kroger prioritized its financial return over its obligations.

This is a case every dealmaker in America will be watching closely, both because of the money involved but also because the court might better define what the words “any and all actions” really mean.