The Kroger & Albertsons merger is still up in the air7 Dec 2024 19:29
Interesting article. Decision expected any day but maybe that will be postponed longer with only a few weeks to Christmas and change of administration in January.
"“It could come any day now,” said Joe Feldman, senior managing director of Telsey Advisory Group, which tracks retail and consumer companies. He added that both companies are likely preparing for either outcome. “It’s like a coin flip, probably.”
This has all been happening during the U.S. presidential election, which resulted in Donald Trump beating Kamala Harris. The FTC’s lawsuit was brought by Lina Khan, who was appointed by President Biden and has been going after larger mergers. But the Trump administration is reportedly crafting a list of candidates to replace Khan and is expected to be more deal-friendly. Both Kroger’s and Albertsons’ shares soared since the election as investors anticipated the deal would face little resistance under Trump, CNN reported. But with Biden set to step down, the pendulum could swing. Here’s what that may mean for the proposed merger."
"Dave Marcotte, an analyst for Kantar, said he expects Albertsons will still sell or come up with another resolution if the merger doesn’t work out. Albertsons’ share price has fallen more than 13% since the start of 2024, while Kroger’s has increased more than 30%. “Albertsons needs this deal,” he said. “It’s quite clear that their investors want to basically get out of the business and sell.”
Others have a different view.
Both Kroger and Albertsons have the potential to grow even if the merger fails, Feldman said. He said he sees Kroger as still a strong player in the grocery space and that at the current price, Albertsons’ stock is undervalued. Both are growing their digital presence, retail media and digital marketing, and he said he believes there are many operational improvements both companies can make to their stores.
“I think there’s a lot of good things that both companies can do to proceed as standalone organizations if that’s what ends up happening,” Feldman said.""
https://www.modernretail.co/operations/the-kroger-albertsons-merger-is-still-up-in-the-air-with-a-new-ftc-likely-looming/
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