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Are FTC regulators two weeks away from a decision on Kroger's $25B Albertsons takeover?

Kroger CEO Rodney McMullen on Thursday repeated that the Cincinnati-based supermarket giant was aiming to close its $25 billion deal to acquire Albertsons.

What's new was that Kroger disclosed the company had “certified substantial compliance” as of Nov. 15 with the Federal Trade Commission. The move could prompt a decision by Dec. 15 by the antitrust regulator to decide whether to approve or fight one of the largest retail mergers ever.

“We continue to work cooperatively with the FTC in its review of the transaction,” McMullen told Wall Street analysts on a conference call. “This step keeps us on track to close our proposed merger with Albertsons in early 2024.”

The disclosure comes weeks after Federal Trade Commission Chair Lina Khan told local news media in Denver the agency might not finish its review until 2024. Her comments followed a local "listening session" held with Colorado Attorney General Phil Weiser, according to 9NEWS in Denver.

Christopher Jones, the senior vice president of government relations & counsel at trade group the National Grocers Association, told The Cincinnati Enquirer, part of the USA TODAY Network, the FTC’s review of the mega-merger has been long – and justifiably so.

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“The merger of the nation's two largest conventional grocery chains presents substantial competitive concerns,” Jones said. “To prevent anticompetitive behaviors, it's crucial that the FTC thoroughly scrutinize this transaction while revisiting and reinforcing antitrust laws.”

So what does the latest disclosure mean for the controversial merger?

Here’s what we know:

What is the status of the Kroger-Albertsons proposal?

Under The Hart-Scott-Rodino Act of 1976, there’s a 30-day waiting period for some large mergers and acquisitions after a premerger notification is filed with regulators. If regulators take no action, then the companies are free to complete their deal.

But if the regulatory agency conducting the antitrust review decides it needs more information, it sends the merging parties a “second request” for that data. Such a move stops the clock for any regulatory deadlines to decide whether to approve or fight a proposed merger.

Kroger disclosed in December 2022 that the FTC had made a second request and has spent the past year providing information in a bid to mollify regulators’ questions and concerns about the deal.

Kroger CEO Rodney McMullen told Wall Street analysts on Thursday the company had u0022certified substantial complianceu0022 for information requests by regulators at the Federal Trade Commission.
Kroger CEO Rodney McMullen told Wall Street analysts on Thursday the company had u0022certified substantial complianceu0022 for information requests by regulators at the Federal Trade Commission.

What does the latest disclosure mean?

The latest disclosure means Kroger is attempting to restart the clock by asserting it has provided enough information to answer the FTC’s questions from its “second request.”

The FTC won’t comment on the Kroger-Albertsons proposal, but according to their merger review process “once both companies have substantially complied … the agency has an additional 30 days to review the materials and take action, if necessary.”

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It does not mean the FTC has come to any agreement with Kroger and Albertsons on the deal or a timeline for approving or fighting the deal. The FTC might not even agree with Kroger and Albertsons that they have complied enough with the “second request.”

What’s next?

Well, the ball is in the FTC’s court – and for the past year, the agency has refused to even acknowledge it is the regulator conducting the antitrust review (but Kroger regulatory filings confirm it is the regulator). It declined any comment on Kroger’s compliance claim.

There are a number of possible next steps:

It’s possible, the FTC takes no action or even endorses the merger, either of which would allow the deal to proceed to closing.

Or the agency may choose several ways to oppose the deal going forward. For one, it could file a lawsuit to challenge the merger from going through – and it could file for an injunction to delay the merger as the antitrust case went to court.

The FTC may also challenge Kroger and Albertsons on whether they have fully complied with information requests. That could start with a harsh letter from the regulator but end up in a separate lawsuit.

For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow @alexcoolidge on Twitter.

This article originally appeared on Cincinnati Enquirer: Kroger-Albertson merger: Could FTC decide in two weeks?