SEATTLE — It has been more than two weeks since the announcement that Kroger and Albertsons agreed to merge.
The more than $20 billion deal would allow Kroger, which owns Fred Meyer and QFC stores, to acquire Albertsons, which owns Safeway stores. The deal still needs federal regulatory approval.
Faye Guenther is president of United Food and Commercial Workers 3000, a union that represents 26,000 grocery store workers.
"We were surprised by the announcement and came out very quickly in opposition to the merger,” said Guenther. "If you have a Safeway, right across the street from Kroger, which of those stores will be closed? I don't know the answer to that. But the threat is it will either be divested or closed."
Kroger and Albertsons have more than 710,000 employees in nearly 5,000 stores across the country combined.
In the merger announcement, it states part of the deal is Albertsons will pay a special cash dividend of up to $4 billion in November to shareholders.
Bob Ferguson joined with five other attorneys general adding his signature to a letter, urging Albertsons to postpone payment until the regulatory review of the merger is complete and the merger closes.
A statement from an Albertsons Companies' spokesperson says, in part: "The special dividend allows us to return cash to all of Albertsons Companies' shareholders. Following the dividend payment, Albertsons Cos. will continue to be well capitalized with a low debt profile and strong free cash flow."
"Four billion should be invested back into the grocery stores to make sure that consumer prices come down, that workers' pensions are safe, that people have good jobs,” said Guenther.
The letter also notes that grocery prices rose more than 12% from last summer to this summer, the biggest jump in more than 40 years.
Guenther said that's another reason why she opposes the merger. She worries it would result in higher prices.
“Having a strong Albertsons and having a strong Kroger, those are both good things for consumers,” Guenther said.
The transaction is expected to close in early 2024, subject to the receipt of required regulatory clearance and other customary closing conditions, a news release stated.
Below is the full statement from Albertsons Companies spokesperson:
“Our planned combination with Kroger will provide significant benefits to consumers, associates, and communities and offers a compelling alternative to larger and non-union competitors. The merger announcement and special dividend mark the successful outcome of the strategic review we launched in February, which considered a wide range of options to build on our success and deliver enhanced value for all our stakeholders. The special dividend allows us to return cash to all of Albertsons Companies’ shareholders. Following the dividend payment, Albertsons Cos. will continue to be well capitalized with a low debt profile and strong free cash flow. Given our financial strength and positive business outlook, we are confident that we will maintain our strong financial position as we work toward the closing of the merger.”