Kroger taps ex-House Speaker John Boehner as special adviser amid pending merger

With its $24.6 billion merger deal with Albertsons Cos. now in the regulatory review phase, The Kroger Co. confirmed that it has enlisted former U.S. House Speaker John Boehner (R., Ohio) as a strategic adviser.

Cincinnati-based Kroger has retained global law and lobbying firm Squire Patton Boggs, headquartered in Cleveland, to help shepherd the supermarket mega-merger through the antitrust approval process, with Boehner serving in the role of “strategic counsel,” Punchbowl News reported Thursday. Boehner, who was House Speaker from January 2011 to October 2015, joined Squire Patton Boggs in the fall of 2016 as senior strategic adviser, serving U.S. and international clients.

Kroger declined to provide further comment after being contacted by Winsight Grocery Business.

Under the merger agreement, unveiled in mid-October 2022, Kroger plans to acquire Boise, Idaho-based Albertsons, a transaction that would join the nation’s two largest supermarket retailers. Together, the companies would operate 4,996 stores, 3,972 pharmacies, 2,015 fuel centers, 66 distribution centers and 52 manufacturing plants across 48 states and the District of Columbia.

Boehner won’t register to lobby on behalf of Kroger, noted Punchbowl, which first reported the news of the former speaker’s retention by the company. However, the grocery store giant and its merger partner have some well-connected lobbying muscle.

Boehner served as U.S. House Speaker from 2011 to 2015 before joining Squire Patton Boggs as senior special adviser in 2016. / Photo courtesy of Squire Patton Boggs

According to Punchbowl, Kroger will have Squire Patton Boggs principals Thomas Andrews and David Schnittger, both ex-Boehner aides, as lobbyists. Andrews also had served on the staff of former House Speaker Paul Ryan (R., Wisconsin). Punchbowl said another Squire Patton Boggs principal, Caren Street, also will lobby for Kroger. Street previously served as chief of staff to former Rep. Karen Bass (D., California), the current mayor of Los Angeles.

Kroger also has enlisted Smith-Free Group and Arnold & Porter for its lobbying efforts and bulked up its internal lobbying operation, Punchbowl reported, adding that lobbyists supporting Albertsons include Miller Strategies, led by Jeff Miller, a confidant and friend of current House Speaker Kevin McCarthy (D., California).

Kroger and Albertsons have said they expect to close the deal in early 2024, pending federal and state regulatory approval and other customary closing conditions. Yet Wall Street analysts and other industry observers say antitrust clearance is likely to take longer for such a large transaction—the biggest U.S. supermarket merger ever—and could last up to two years.

In early December, Kroger reported that it received a second request for information from the FTC on the proposed merger. The move signaled that the FTC holds significant antitrust concerns and seeks a deeper investigation, which observers say could extend the review by months and the time to finalize the transaction by a year. The FTC’s second request came a week after Kroger Chairman and CEO Rodney McMullen and Albertsons Cos. CEO Vivek Sankaran were grilled by lawmakers in a Senate Judiciary subcommittee hearing on the planned merger.

Opposition to the Kroger-Albertsons merger deal has continued to mount. In mid-February, for example, Arizona Attorney General Kris Mayes announced an investigation of the proposed transaction, citing concerns about its possible impact on the state’s grocery retail market.

Kroger Chairman and CEO Rodney McMullen last week said regulatory negotiations for the merger are moving forward. / Photos: Shutterstock

The probe marked one of the latest hurdles for the planned merger on the legal front. Earlier in February, a group of 25 consumers from 11 states filed a private lawsuit in federal court to block the merger as well as terminate a $4 billion special dividend payment by Albertsons that was disclosed when the agreement was announced. Albertsons, however, was cleared to initiate the dividend payment after an over two-month delay from state litigation aiming to prevent the dividend.

Colorado and Washington state also are pursuing their own investigations to potentially block the merger. On Thursday evening, Colorado Attorney General Phil Weiser is slated to discuss his probe of the proposed merger at a community town hall event in Denver, which also will be attended by members of United Food and Commercial Workers Local 7. The nation’s largest grocery retail and food workers union, UFCW and its local chapters have spoken out against a combination of Kroger and Albertsons.

Still, Kroger’s McMullen—who would helm the combined Kroger-Albertsons—last week said negotiations to gain regulatory clearance for the merger are on track.

“We are working cooperatively with regulators, responding to the Federal Trade Commission’s second request, and in discussions about the transaction, while also working to identify potential buyers for the stores we expect to divest to obtain clearance for the transaction,” McMullen said in a March 2 call with analysts on Kroger’s fiscal 2022 results. (Call transcript provided by AlphaSense.)

To get the regulatory green light, Kroger and Albertsons have reckoned they need to make 100 to 375 store divestitures via direct sales to buyers or spinoffs into a new Albertsons subsidiary dubbed SpinCo, which would operate as a stand-alone public company. The merger deal sets a store divestiture ceiling of 650, at which point the companies could re-evaluate the transaction.

“We are pleased with the level of interest received thus far,” McMullen told analysts, “and will work towards finding a solution that benefits all stakeholders. We remain on track to close the transaction in early 2024.”

Kroger and Albertsons also have started laying the integration groundwork for the merger. “During the quarter, we launched our integration planning efforts, with the goal of preparing for a seamless cultural and operational integration,” McMullen said in the call. “We expect to create customer benefits beginning day one of close.”