The U.S. Federal Trade Commission (FTC) could sue to block the proposed merger between Kroger Co. and Albertsons, Bloomberg News reported. The report cited people familiar with the matter.

The lawsuit, which could also include several states, is expected to be filed before Feb. 28, the report found. That’s when an agreement between the grocery retailers and the FTC not to close the deal will expire.

California attorney general Rob Bonta also told Bloomberg that an FTC complaint regarding the merger was forthcoming. He added that California will most likely join the complaint.

The two grocery retailers first proposed the deal in 2022. Kroger was slated to buy Albertsons for $24.6 billion, pending regulatory approval. The merger would allow the chains to create a “premier omnichannel food retailer,” Kroger said in a statement at the time.

Kroger is No. 8 in the Top 1000, Digital Commerce 360’s ranking of North America’s leading retailers by online sales. Albertsons ranks No. 26. The two chains also make up the first and second largest retailers in the Food & Beverage category of the Top 1000.

Kroger and Albertsons talk to the FTC

Both grocery retailers confirmed they are in talks with the FTC.

“Kroger remains in ongoing discussions with the FTC and state regulators,” a Kroger spokesperson said in a written statement. “This merger is the best thing for America’s consumers because it will lead to lower prices and more choices on the foods customers need, want and love. Blocking the combination will only embolden large, non-unionized retailers — like Walmart, Amazon and Costco — to continue opposing unions and leaving communities. Kroger will continue to lower prices, grow good-paying union jobs and increase access to fresh food for the families who need it most,” the spokesperson continued.

Albertsons shared a similar statement. The grocery retailer is “continuing to work closely with the FTC. This merger will expand competition, lower prices, protect union jobs, and enhance customers’ shopping experience,” a spokesperson said.

Other lawsuits facing the Kroger Albertsons merger

In January, Washington state attorney general Bob Ferguson filed a lawsuit in King County Superior Court in an attempt to block the deal.

Ferguson said the merger would give Kroger a near-monopoly in Washington.

“The Proposed Transaction would combine the two largest — and, in some areas, the only — supermarkets in many communities across Washington, which is likely to lead to higher prices, lower quality, and less variety in many local markets throughout Washington,” the lawsuit reads. 

Kroger and Albertsons are the two largest grocery chains in Washington. With more than 300 combined locations in the state, together they account for more than 50% of total grocery sales. 

Kroger and Albertsons previously agreed to sell 100 stores in Washington in hopes of gaining regulatory approval. That’s not enough to offset the impact of the merger on Washington consumers, the lawsuit says, calling the move “woefully inadequate.”

Then, on Feb. 14, Colorado attorney general Phil Weiser filed a lawsuit to block the deal. Weiser cited similar reasoning to Ferguson, including decreased competition in the grocery space leading to higher prices and fewer jobs. He also accused Kroger and Albertsons of making an illegal agreement not to hire the other’s employees during a 2022 strike by Kroger workers.

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