Parties involved in the proposed Kroger – Albertsons merger have announced that as many as 420 stores would be sold to C&S. This action is intended to allay concerns by the Federal Trade Commission that the proposed merger would be noncompetitive.

Members of the United Food Commercial and Warehouse union have questioned the viability and legitimacy of the proposed transaction and point to previous experience with the acquisition of Safeway by Albertsons. Sale of stores to Hagen resulted in a filing for bankruptcy within months after the transaction.

Economists for the UFCW Union point to the apparent low price for the stores.  They estimate that eight warehouses in the transaction are worth between $400 to $800 million, and the 413 stores could have a collective value of $3 billion.  They regard the $1.9 billion sale price as unrealistic. The UFCW regards the proposed C&S sale as “Hagen 2.0” with a similar outcome.

The Union questions the ability of C&S to effectively manage over 400 stores.  Currently, the Company operates 55 acquired locations and franchises about 100 stores.  C&S has a history of eliminating union positions that would be to the detriment of workers if the transaction were to proceed.   

California has forwarded three bills to Governor Gavin Newsom, requiring severance pay for workers and providing for other protection in the event that the merger is concluded.