Albertsons ends merger with Kroger after court blocks

Albertsons Companies (NYSE: ACI) announced today that it has terminated its merger agreement with Kroger Company (NYSE: KR) following injunctions from both the U.S. District Court in Oregon and the King County Superior Court for the State of Washington.

The court rulings, issued on December 10, 2024, effectively blocked the proposed merger.

CEO Vivek Sankaran expressed disappointment in the courts' decisions but emphasized the company's strong financial condition and positive business performance. Sankaran outlined Albertsons' commitment to its "Customers for Life" strategy and value-creating initiatives, hinting at further details to be disclosed in an earnings conference call in January 2025.

Jim Donald, Board Chair, praised the leadership team's efforts to adapt to the changing consumer landscape and their role in driving long-term stockholder value.

Cerberus Capital Management, L.P., Albertsons' largest shareholder, reaffirmed its confidence in the company's standalone strength and market undervaluation, indicating no plans to sell its shares. Cerberus has been a major investor in Albertsons since 2006 and has supported the company through various strategic initiatives.

Albertsons' "Customers for Life" strategy focuses on enhancing customer value, investing in stores and technology, and expanding omnichannel revenue. The company aims to accelerate growth in areas such as the Albertsons Media Collective and improve supply chain and merchandising efficiency.

For fiscal 2024, Albertsons forecasts identical sales growth of 1.8% to 2.2%, adjusted EBITDA between $3.90 and $3.98 billion, and adjusted EPS of $2.20 to $2.30 per share.

The company anticipates an annual income tax rate of approximately 23% and capital expenditures ranging from $1.8 to $1.9 billion.

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