According to Zhizhong Finance APP, a federal judge in the USA has blocked The Kroger (KR.US) from acquiring Albertsons Companies (ACI.US) for $24.6 billion, believing that this acquisition would reduce competition in the USA grocery Industry, a ruling that may signal the end of the trade.

District Judge Adrienne Nelson in Oregon, USA, ruled in favor of the Federal Trade Commission (FTC) on Tuesday. The FTC stated that the proposed merger violated US antitrust laws, and divesting hundreds of stores to C&S Wholesale Grocers Inc. would not sufficiently compensate for the lost competition.

Nelson stated, "There is ample evidence that the divestiture was insufficient for the merged company to compete effectively, and its structure would place C&S at a distinct disadvantage as a competitor. The flaws in the scope and structure of the divestiture create a risk that some or all of the divested stores may lose sales or close, as has happened in previous acquisitions by C&S."

Nelson's decision is a significant victory for the FTC and its soon-to-be-former chair, Lina Khan. During the Biden administration, Khan has faced severe criticism from conservatives and business groups for intensifying antitrust enforcement.

A spokesperson for The Kroger expressed disappointment with the ruling issued on Tuesday, stating that the trade could have lowered prices, increased worker wages, and improved store conditions. The Kroger is currently reviewing options related to the acquisition.

A spokesperson for Albertsons Companies stated that the company is reviewing the court's ruling and assessing its options based on the merger agreement. Lawyers for both companies indicated that if the judge overturned the trade, the acquisition could be canceled.

FTC spokesperson Douglas Farrar stated: "Today's victory protects competition in the grocery market, which will prevent prices from rising further. This victory shows that strong, reality-based antitrust enforcement brings real results for consumers, workers, and small businesses."

A spokesperson for C&S Wholesale expressed disappointment with the court's ruling and looks forward to seeing how The Kroger and Albertsons Companies decide to proceed with the proposed Trade.

Analyst Jacob Aiken-Phillips from Melius Research stated on Tuesday that the merged entity would be able to compete more effectively with Amazon, Walmart, and Other Retailers not defined by the FTC.

He indicated: "While we expect there will be more news, possibly an appeal, we would not be surprised if Other Retailers show interest in Albertsons Companies." A breakup fee of $0.6 billion would benefit Albertsons Companies but would not significantly impact The Kroger.

It is reported that The Kroger and Albertsons Companies announced their agreement to merge in October 2022, which is expected to become the largest supermarket acquisition in USA history. As the fifth and tenth largest supermarkets in the USA, if the two companies successfully merge, they will integrate over 4,000 stores across 48 states and Washington, D.C. However, the Trade has faced opposition from USA officials, labor organizations, and consumer protection groups.

The Kroger may refocus on improving and investing in its existing network of approximately 2,750 stores. On the other hand, Albertsons Companies may again become an acquisition target, but the company is expected to invest in its approximately 2,270 stores and technology in the short term.

As of the close on Tuesday, The Kroger was up 5.12%, while Albertsons Companies was down 2.27%.