Attorney General Kwame Raoul, as part of a bipartisan coalition of six attorneys general, is calling on grocery chain Albertsons to hold off on paying out nearly $4 billion to its shareholders until the coalition can complete its review of the proposed merger with Kroger.
“The proposed merger between Albertsons and Kroger could severely reduce competition, lead to increased food prices at a time families are struggling to keep up, and worsen food insecurity impacting low-income and minority communities in particular,” Raoul said. “It is imperative that neither company act to potentially affect a merger outcome while state attorneys general continue our review.”
Albertsons – which announced the proposed merger with Kroger on Oct. 14 – also announced a “special dividend” to be paid to shareholders Nov. 7 at $6.85 per share. The dividend would total nearly $4 billion, which is more than two years of profits for the company. Raoul and the coalition sent a letter to Albertsons and Kroger expressing concerns that the special dividend risks significantly limiting Albertsons’ ability to operate and properly compete with Kroger, which could seriously impact consumers, workers and the grocery industry at large before regulators even have a chance to review the deal.
Raoul and the coalition are concerned additional consolidation in the grocery industry could lead to even higher food prices at a time when many families across the country are struggling to put food on the table. They are also examining whether the special dividend or the merger could reduce good, high-paying jobs and hurt wages and benefits for workers. Meanwhile, the private equity investors who control the grocery chains will have gained profits nine times larger than their original investments in 2006 if the merger is approved.
Albertsons and Kroger have more than 710,000 employees in nearly 5,000 stores across 48 states and D.C., reinforcing that all corners of the country would feel the effects of the proposed merger. The merger would have particular impact in Illinois, since two of the Chicago area’s major grocery chains, Jewel-Osco and Mariano’s, are owned by Albertsons and Kroger.
Joining Raoul in sending the letter are the attorneys general of Arizona, California, the District of Columbia, Idaho and Washington.
Original source can be found here.