Summary Of Kroger And Albertson Merger

Kroger announced that it would acquire Albertsons in October of last year. The multibillion-dollar merger has been criticized by consumer advocates, unions and independent grocers. Consumer advocates believe that the merge would create a monopoly of sorts by creating a megacorporation in control of thousands of stores and chains like Safeway, Ralphs and Vons. This would lead to decreased competition and a rise consumer prices. Union officials feel that the merger would end up forcing the sale or closure of hundreds of stores and putting jobs at risk. The two grocery chains maintain that the merger will be good for consumers, employees and communities. However, the biggest winner of the merger would be the private-equity company, Cerberus, who

As the article doesn’t go into much detail on the contractual verbiage between the two grocery stores, I will assume that Kroger and Albertsons will merge and become one new entity. That said, the main issue that has arisen from the news of the merger is that Albertsons has decided to pay its shareholders a $4 billion dividend. The news article does do a good job of giving us background on how various stakeholders view the buyout and of it affects them. From internal stakeholders such as shareholders and employees to external stakeholders like consumers and competitors, the merger has widespread effect on the

Employees are fearful for their jobs as Kroger nor Albertsons have fostered strong integration practices. This lack of organizational strategy hinders a healthy work culture. Kyong Barry, a member of the United Food and Commercial Workers International Union which has 350,000 members working for Kroger and Albertsons, asks ''Is my store going to be one that closes? Is my livelihood going to go away?'' (Creswell, 2023). Whether it is a lack of initiative by corporate level executives or poor communication between business level managers, the company has failed to clearly state their vision to its employees. The fear of unstable job security is further iterated by union officials who believe that in order to receive regulatory approval Kroger will be forced into divestiture. Thus, placing hundreds of stores into a new company owned by Albertsons or being sold off completely and inevitably effecting thousands of employees. An equity analyst, Arun Sundaram stated, “That's where the most uncertainty lies -- how many stores will they have to divest?'' (Creswell,