On Tuesday, The Kroger Company ( KR ) announced it has submitted its official response and counterclaims in the Delaware Court of Chancery regarding the lawsuit filed by Albertsons Companies Inc ( ACI ) , which relates to the termination of their merger agreement in December 2024.

In its counterclaims, Kroger ( KR ) accused Albertsons ( ACI ) of acting in bad faith by damaging Kroger’s efforts to obtain regulatory approval for the merger.

Kroger ( KR ) alleged that Albertsons ( ACI ) secretly collaborated with C&S Wholesale Grocers, the designated buyer for divestitures, to pursue its own agenda.

The filing highlighted evidence uncovered during antitrust trials, which include private communications between Albertsons’ executives, such as CEO-designate Susan Morris, and C&S’s leadership.

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Kroger ( KR ) said these actions contributed to the merger's failure, as regulators were misled into believing C&S was an unsuitable divestiture buyer.

Kroger ( KR ) further claimed that Albertsons ( ACI ) executives contradicted their earlier testimony in antitrust hearings.

These actions form the basis of Kroger's ( KR ) argument that Albertsons ( ACI ) is not entitled to the $600 million termination fee outlined in their agreement, nor any other damages.

Kroger ( KR ) is also using the counterclaims to seek compensation for the resources invested in the merger process.

The filing also stated that Albertsons ( ACI ) devised a “Plan B” to initiate a legal dispute if the merger fell through, complete with falsified evidence.

This plan reportedly contained baseless accusations from Albertsons ( ACI ) executives, which contradicted their sworn statements in court. Kroger ( KR ) argued that Albertsons ( ACI ) had already pivoted to litigation long before the merger's failure, indicating that the company had abandoned its commitment to completing the deal.

Last year, Albertsons ( ACI ) terminated its planned merger with Kroger ( KR ) and initiated legal action against the supermarket giant. The lawsuit professed that Kroger ( KR ) breached the merger agreement by not fully fulfilling its responsibilities to obtain regulatory approval.

Price Action: KR shares closed lower by 1.62% at $64.34 on Tuesday.

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