BOISE — Idaho Attorney General Lawrence Wasden is calling on Albertsons to delay its planned $4 billion “special dividend” to shareholders until a group of attorneys general and the Federal Trade Commission can finish reviewing the Boise grocery company’s planned merger with Kroger.
Wasden signed a letter dated Wednesday that says the payout would take so much money out of Albertsons — the equivalent of one-third of its market value — that the company would lack the cash to compete while the merger review is pending or if the merger failed.
“Grocery stores supply daily necessities to millions of people throughout the United States and employ hundreds of thousands of workers in communities across the country,” the letter said. “That is why we are dedicated to ensuring that the proposed merger of Kroger and Albertsons ... does not result in higher prices for consumers, suppressed wages for workers, or other anticompetitive effects.”
“Moreover, regulatory approval of the merger is far from assured,” the letter continued. “The states must undertake their review and assure themselves that competition in all relevant antitrust markets at issue is preserved.”
Wasden was one of six attorneys general — four Democrats and two Republicans — who signed the letter to Albertsons CEO Vivek Sankaran and Kroger CEO W. Rodney McMullen.
A spokesman told the Idaho Statesman that Wasden had no comment beyond the letter itself. Calls seeking comment from Albertsons were not immediately returned.
The two companies announced Oct. 14 that they had signed a deal to merge, with Kroger buying all of Albertsons’ outstanding stock and remaining in charge. One goal of the merger is to allow the merged company to compete more effectively with other grocery retailers, including Walmart. But the merger has drawn criticism from unions and some members of Congress.
Albertsons is Idaho’s largest company and a Boise icon, with $72 billion in yearly sales, 290,000 employees nationwide and more than 5,000 employees in Idaho. Kroger, based in Cincinnati, employs 420,000 people nationwide. Both companies operate stores under multiple banners. Kroger’s Fred Meyer unit, based in Portland, competes directly with Albertsons in the Boise area.
The combined company would employ more than 710,000 people and operate nearly 5,000 stores in 48 states and the District of Columbia.
Albertsons has sold stock publicly since June 2020 but remains controlled by Cerberus Capital Management, a New York private equity firm that leads a group of investment companies that first acquired part of the former Albertsons Inc. in 2006. Cerberus alone still holds roughly 30% of Albertsons’ shares and would collect a large share of the special dividend.
The Democrats who signed the letter represent the District of Columbia, California, Illinois and Washington. Wasden and Arizona Attorney General Mark Brnovich were the Republicans who signed. Both men lost primary elections this year — Wasden for reelection to a sixth four-year term, Brnovich for a U.S. Senate seat — so they are nearing the end of their terms.
Raul Labrador defeated Wasden.
