Kroger turns to former speaker Boehner for merger help

It helps to know people in high places, like someone who used to stand atop the House of Representative chamber with gavel in hand.

Kroger is connecting with former Speaker of the House John Boehner (R-Ohio) in the hopes the Washington veteran can help get the support needed to get Congressional approval for the Kroger-Albertsons merger. Kroger now has Boehner, who is working for law and lobbying firm Squire Patton Boggs, under contract. He’s not going to register to lobby, but he will provide counsel to Kroger executives. Tommy Andrews and David Schnittger, two former Boehner aids who also work at Squire Patton Boggs, and Caren Street, former chief of staff to then-Rep. Karen Bass (D-Calif.), will be Kroger lobbyists. Bass is the executive director of the Congressional Black Caucus. Kroger spent $950,000 on lobbying efforts last year, while Albertsons dropped $2.2 million. Jeff Miller, who has ties to current House Speaker Kevin McCarthy (R-Calif.), has been lobbying on behalf of Albertsons.

Lawmaker support for the $25 billion merger has been a bit soft. Back in November members of the Senate’s antitrust panel raised doubts in front of the CEOs of Kroger and Alberstons. Some were not certain the grocery giants would keep jobs intact and lower prices. Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) put together a letter encouraging the Federal Trade Commission (FTC) to reject the merger. Unions representing more than 100,000 Kroger and Albertsons workers have been protesting the deal since it was first announced.

Related:Arizona launches antitrust investigation into Kroger-Albertsons merger

The FTC is currently reviewing the merger, and some say it will block the effort.

A few weeks ago Kroger and Albertsons were discussing plans to divest between 250 and 300 stores to satisfy antitrust concerns around their proposed merger, according to a Reuters report.

The stores in question may span across all the regions where the two companies operate, and could generate more than $1 billion for the companies through their sale, Reuters said, citing unnamed sources.

The two companies previously said they expected to divest between 100 and 375 locations as part of their $24.6 billion merger agreement, and had proposed creating a new company to operate the divested locations. Kroger said in a financial filing that if the companies are forced to divest more than 650 locations, the merger would be reconsidered.

Kroger and Albertsons have considerable overlap in several markets in the Western U.S. and in Chicago, and much less overlap in other Midwestern markets and in the Northeast and Mid-Atlantic.

Related:Consumers file antitrust suit to block Kroger-Albertsons merger

The companies have been in touch with potential buyers for the stores, and have discussed their plans with the Federal Trade Commission, according to the Reuters report.

The report also cited Ahold Delhaize — which previously was reported to have been interested in acquiring all or part of Albertsons before the Kroger deal was announced — as one of the potential buyers of the divested locations.

The merger, which would be the largest in the history of the industry, is expected to close in 2024.