In an attempt to appease the Federal Trade Commission (FTC), The Kroger Company and Albertsons Companies announced that 166 additional stores will be added to the list that will be divested to C&S Wholesale Grocers for a total of 579 locations. 

According to a Kroger press release, C&S will operate the Safeway banner in Arizona and Colorado and will license the Albertsons banner in California and Wyoming. Presumably this will be convenient for Kroger and Albertsons should the anticipated transaction be concluded and subsequently C&S goes the way of Haggen after the Safeway transaction in 2016.

The merger elicited a negative response from the FTC.  The Agency stated, “The proposal completely ignores many affected regional and local markets where Kroger and Albertsons compete today.”  The statement added, “In areas where there are divestitures, the proposal fails to include all of the access, resources and capabilities C&S will need to replicate the competitive intensity that exists today between Kroger and Albertsons.  Even if C&S were to survive as an operation, Kroger and Albertsons proposed divestitures still do not solve the multitude of competitive issues created by the proposed acquisition.”

In support of the proposed merger/acquisition, the CEO of The Kroger Company, Rodney McMullen stated, “Our proposed merger with Albertsons will bring lower prices and more choices to more customers and secure the long-term future of unionized grocery jobs.”  McMullen noted that the divestiture plan would ensure that no stores will close, and all frontline associates will remain employed with continuation of existing collective bargaining agreements.  The Kroger Company intends to support C&S operations “through expanded transition services.”