The Attorneys General of Nevada and Washington File Lawsuits Over Safeway/Albertsons Merger

Thu. February 5th, 2015 - by Andrew McDaniel

PLEASANTON, CA & BOISE, ID – The Attorneys General of Nevada and Washington have asked two separate federal courts to stop the planned acquisition of various Safeway grocery stores in their states, both arguing the proposed merger is unlawful and will hurt businesses.

According to Legal Newsline, Nevada Attorney General Adam Laxalt filed his lawsuit against Cerberus Institutional Partners V, AB Acuisition LLC – the owner of Albertsons, and Safeway Inc. in the U.S. District Court for the District of Nevada.

Washington Attorney General Bob Ferguson filed his suit against the same plaintiffs in the U.S. District Court for the Western District of Washington.

These lawsuits were filed on the same day that the retailers announced the completion of the $9.2 billion merger and days after the Federal Trade Commission approved the merger under the condition that the companies sell 168 stores.

According to Law360, the Nevada complaint says that the deal was in violation of federal antitrust and Nevada state consumer protection laws.

The Washington complaint is similar saying that the merger would eliminate “substantial competition” between Albertsons and Safeway in Washington. It also says that the merger will reduce the number of meaningful competitors in Snohomish, Sammamish and Port Angeles from 2 to 1 and reduce competition in other regions as well.

The court filing says, “The ultimate effect of the proposed acquisition would be to increase the likelihood that the prices of food, groceries or services will increase and that the quality and selection of food, groceries or services will decrease in each of the relevant geographic markets.”

Albertsons/Safeway Spokesman Brian Dowling told Law360 on Tuesday of this week that the complaint “simply tracks with the FTC consent order to give the state the right to enforce the terms of the FTC consent order with respect to this states. This will not add to any relief the companies have already agreed to provide in the FTC consent order.”

Under the FTC consent order, Safeway/Albertsons agreed:

  • Haggen Holdings, LLC will acquire 146 Albertsons and Safeway stores in Arizona, California, Nevada, Oregon and Washington
  • Supervalu Inc. will acquire two Albertsons stores in Washington
  • Associated Wholesale Grocers, Inc. will acquire 12 Albertsons and Safeway stores in Texas
  • Associated Food Stores Inc. will acquire eight Albertsons and Safeway stores in Montana and Wyoming

As a condition of the settlement, the divestitures to Haggen must be completed within 150 days of the date of the merger, to Supervalu Inc. within 100 days, and to Associated Food Stores Inc. and Associated Wholesale Grocers, Inc. within 60 days.

Additionally, the settlement includes an Order to Maintain Assets, which will help to ensure that Albertsons maintains the stores until they are divested, and the appointment of a monitor to oversee the merging parties’ compliance with their obligations under the settlement agreement.

For now it is unclear if any additional action beyond the FTC consent order would be required. Stay tuned to AndNowUKnow for the latest updates as we continue to track what, if any, effects these lawsuits have on the Safeway/Albertsons merger.