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Three attorneys general file lawsuit seeking to block Albertsons’ $4 billion payout By Reuters

© Reuters. FILE PHOTO: The Albertsons logo is seen on an Albertsons grocery store, as Kroger agrees to buy rival Albertsons in a deal to combine the two supermarket chains, in Rancho Cucamonga, California, U.S., October 14, 2022. REUTERS/Aude Guerrucci

By Siddharth Cavale

NEW YORK (Reuters) -The attorneys general of Washington D.C., California and Illinois filed a lawsuit on Wednesday in a federal court seeking to block grocer Albertsons’ $4 billion dividend payout to shareholders before the closure of its proposed merger with rival Kroger (NYSE:).

“(The lawsuit)is seeking a temporary restraining order to stop a nearly $4 billion payout to Albertsons’ shareholders — a payout 57 times greater than the historic dividends Albertsons has provided — until a full review of their proposed merger is complete,” Karl Racine, the attorney general for Washington D.C. said in a statement.

The lawsuit was filed under seal in the U.S. district court for the District of Columbia, he said.

“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” Racine added.

Reuters reported the news first earlier on Wednesday.

Albertsons and Kroger did not immediately respond to requests for comment.

Kroger snapped up Albertsons in a $25 billion deal last month, to better compete against U.S. grocery industry leader Walmart (NYSE:) Inc on prices.

Albertsons announced a payout of a “special cash dividend” of up to $4 billion to its shareholders as part of the deal.

The case filed on Wednesday is District of Columbia office of attorney general et al v. Kroger co. Et al with the case number 1:22-cv-03357.

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