Albertsons calls off merger with Kroger. Now what?

Grocery workers in the Puget Sound region were relieved as a merger between Albertsons and Kroger broke down.

The two grocery giants that had planned to merge are now at loggerheads. Albertsons announced it’s pulling out of the agreement with Kroger, and is suing the company for breach of contract.

RELATED: Albertsons sues Kroger and ends failed grocery megamerger

UFCW 3000, the union representing more than 25,000 workers in the region, welcomed the latest announcement. Spokesperson Tom Geiger said the companies should now turn their focus to running grocery stores and invest on improvements that shoppers want.

"Invest in shorter lines," Geiger said, "more staffing to answer questions, better stocking of shelves, lower prices, better wages for workers."

Albertsons' announcement comes one day after two separate court rulings blocked what would have been the largest grocery merger in history, worth nearly $25 billion.

On Tuesday, King County Superior Court Judge Marshall Ferguson ruled the state's Consumer Protection Act prohibits the proposed merger because it may substantially lessen competition in Washington.

Speaking from the bench, he added, "The evidence convincingly shows that the current competition between Kroger and Albertsons stores is fierce in the state of Washington."

The lawsuit was filed by Attorney General Bob Ferguson (no relation to the judge).

Just an hour earlier, a federal court judge in Oregon blocked the deal in a lawsuit filed by the Federal Trade Commission, along with eight other states. The FTC has argued the consolidation of these companies would harm consumers and workers.

RELATED: Kroger and Albertsons grocery megamerger halted by federal court

Both judges questioned the companies’ divestiture plan, noting that the buyer, C&S Wholesale Grocers with its limited infrastructure and retail experience, would be no match to compete against a combined Kroger and Albertsons.

"This deal is dead as a door nail," said University of Washington law professor Doug Ross.

Ross notes the courts' opinion on the divestiture plan is part of Albertsons' basis for suing Kroger.

"They're arguing that Kroger didn’t choose the strongest possible divestiture candidate," he said. "And you can see the bases for these claims in the opinions from the judges denying the merger."

The suit seeks billions of dollars in damages in addition to the previously negotiated $600 million in breakup fees.

In a statement, Kroger said the claims are baseless and without merit. The company said it's committed to lowering grocery prices.

Ross said he doesn’t expect any immediate changes as the companies will be preoccupied with this latest lawsuit. But it won't stop Albertsons for seeking another buyer.