Kroger, Albertsons have spent $864M, so far, on acquisition effort

Nearly two years have passed since Kroger announced its plan to acquire one of its biggest rivals, Albertsons, and during that time, the two companies have spent an estimated $864 million on costs related to the transaction. 

WCPO 9 in Kroger’s hometown of Cincinnati, Ohio, reported on Tuesday that the expense of defending the proposal, which has been challenged by the FTC and 11 attorneys general, equals roughly 3.5% of the total $24.6 billion cost of the deal. 

That’s enough to give every employee at both companies a $1,200 bonus, according to the story.

The majority of the cost has been paid by Kroger, which spent $535 million on the merger through the end of May. Meanwhile, Albertsons has spent $329 million through June 15, according to filings with the U.S. Securities and Exchange Commission. 

The story noted that Kroger released a statement in response to the merger-related expenses.

“Kroger is making record investments in associate wages while continuing to lower prices for customers, and our work to close the proposed merger with Albertsons Cos. has done nothing to change our course. Since 2018, Kroger invested an incremental $2.4 billion to improve wages, which is a 33% increase in rate in five years ... Kroger committed to investing an additional $1 billion in wages and benefits post-close. For our customers, we invested $5 billion to lower prices in the last two decades. We committed an additional $500 million to lower prices in stores after the merger closes.”

Related:Kroger and Albertsons release list of stores to be divested under merger

Kroger and Albertsons will get their day in court beginning on Aug. 26 in Portland, Ore., when it faces the Federal Trade Commission and nine attorneys general who have sued to block the acquisition. 

Kroger could be on the hook for a lot more than the half a billion dollars it’s already spent. A clause in the contract with Albertsons stipulates that Kroger would pay $600 million to the Boise, Idaho-based grocery store company if the acquisition fails. 

The merger also faces separate legal challenges from attorneys general in Colorado and Washington state.