ICLE on Kroger’s Merger with Albertsons
But analysts at the International Center for Law & Economics, a Portland, Ore.-based nonpartisan research center, say changes in the competitive landscape and the rise of e-commerce mean there’s no reason for regulators to reject the deal.
“Attempting to block this transaction would go against the analytical framework the FTC (Federal Trade Commission, a key antitrust regulator) has historically used to evaluate similar transactions, as well as the agency’s historical precedent of accepting divestures as a remedy to address localized problems where they arise,” the report said.
The report acknowledges breaks from precedent happen. But they don’t apply in the Kroger-Albertsons deal, the center’s experts said.
“In the case at hand, these breaks from tradition would reflect a failure to consider relevant and significant changes in how consumers shop for food and groceries in today’s world.”
“The agency appears poised to try to block the transaction – even with divestitures,” the report said.
The FTC has historically ruled that divestitures in supermarket mergers adequately address competition concerns, the report said. The divestitures planned by Kroger and Albertsons should resolve any antitrust concerns, it added.
“The parties appear committed to working cooperatively with regulators to craft divestitures that fully resolve competitive concerns,” it said. “Rather than blocking the deal outright, the FTC can allow the merger to proceed, conditioned on acceptable divestitures that protect consumers while permitting efficiency gains across the majority of stores.”