Proposed Kroger-Albertsons merger under state scrutiny

Washington Attorney General Bob Ferguson is now weighing in on the proposed merger of Kroger and Albertsons stores.

Ferguson also joined his counterparts in the District of Columbia, Arizona, California, Idaho and Illinois to express concerns about the $4 billion shareholder payout in November that’s part of the merger.

In a joint letter to Albertsons, the attorneys general noted that federal and state laws forbid companies to enter agreements that would substantially lessen competition or restrain trade. They say paying a dividend this size before the merger is approved could deprive Albertsons of cash and affect its ability to operate and compete with Kroger.

The letter urged Albertsons to hold off on the dividend until the merger is completed.

Union leaders representing 26,000 grocery workers in Washington applauded the move, adding that any rush payment would threaten thousands of jobs, reduce consumer choice and increase costs.

Last week, Kroger announced plans to buy Albertsons. If approved, the acquisition would create a company with nearly 5,000 stores with an annual revenue of $200 billion.