Dec 10 (Reuters) - A U.S. judge blocked the pending $25

billion merger of U.S. grocery chains Kroger ( KR ) and

Albertsons ( ACI ) on Tuesday, siding with the U.S. Federal

Trade Commission in a win for the Biden administration.

The FTC argued at a three-week trial in Portland, Oregon,

that the merger would eliminate head-to-head competition between

the top two traditional grocery chains, leading to higher prices

for shoppers and reduced bargaining leverage for unionized

workers.

Kroger ( KR ) fought those claims, saying the deal would bring

prices down, particularly at Albertsons ( ACI ) stores, where it said

prices are 10-12% higher than at Kroger ( KR ) stores. The merged

company would fund price cuts through cost savings it expects

from a larger operation, and a larger customer base to drive

revenue for Kroger's ( KR ) data consulting business, Kroger ( KR ) said.

Nelson's ruling essentially scuttles the merger, Kroger ( KR ) has

said in court documents.

Had the deal proceeded, Kroger ( KR ) would own approximately 5,000

stores across the U.S. The companies argued at trial that they

needed to merge to compete with global conglomerates such as

Walmart ( WMT ) and Amazon.com ( AMZN ).

Kroger ( KR ) and Albertsons ( ACI ) had also tried to convince U.S.

District Judge Adrienne Nelson that selling off 579 of the

stores, particularly in western U.S. states where Kroger ( KR ) and

Albertsons ( ACI ) are located near each other, would preserve

competition.

Grocery workers' unions criticized the merger, saying it

would likely lead to job losses, and attorneys general from 10

states and the District of Columbia either joined the FTC's case

or sued to block the merger on their own.