Albertsons Companies and Kroger, the two largest traditional supermarket operators in the United States, went to trial on Monday, October 19, 2026, in the Delaware Court of Chancery. The case is about who is to blame for the collapse of their $24.6 billion merger, and how much that collapse should cost.
Albertsons is asking Vice Chancellor Lori W. Will to order Kroger to pay more than $8 billion. Kroger says it owes nothing, not even the $600 million termination fee written into the 2022 merger agreement.
The bench trial is scheduled to run about two weeks, Reuters reports, and a written ruling could take months after closing arguments. Either side can then appeal to the Delaware Supreme Court. For a grocery industry still reorganizing around the deal’s failure, the trial is the last unresolved piece of the largest attempted supermarket merger in US history.
In short
- Trial opened October 19 in Delaware’s Court of Chancery before Vice Chancellor Lori W. Will; it is a two-week bench trial with no jury.
- Albertsons seeks more than $8 billion: a lost shareholder premium of up to $6.88 billion, the $600 million termination fee, and more than $1 billion in tax adjustments, per its pretrial brief.
- The legal fight is about effort: Albertsons says Kroger broke a promise to take “any and all actions” to win antitrust approval; Kroger says regulators, not Kroger, killed the deal.
- Kroger’s counterattack targets Susan Morris, now Albertsons’ CEO, over communications with C&S Wholesale Grocers that Kroger says undermined the divestiture plan.
- Willful breach is the hinge: Bloomberg Intelligence puts the odds at 70% that Kroger owes the $600 million fee for a non-willful breach, while damages beyond the fee likely require proof of a willful one.
What is the Albertsons v. Kroger trial about?
The dispute traces back to October 14, 2022, when Kroger agreed to buy Albertsons for $24.6 billion. The combined company would have joined the largest and second-largest traditional US grocers and their roughly 5,000 stores, according to Reuters. The stated rationale was scale against Walmart, Costco, Amazon and Aldi, which had taken share from conventional supermarkets for more than a decade.
The Federal Trade Commission and a group of state attorneys general sued to block the merger in early 2024. In December 2024, a federal judge in Oregon and a state judge in Washington both ruled against the companies. Albertsons terminated the merger agreement immediately and, on December 11, 2024, sued Kroger in Delaware, the forum the merger agreement required. Albertsons is a Delaware corporation; Kroger is incorporated in Ohio.
The lawsuit started as a claim for the $600 million termination fee. In its pretrial brief, made public on October 13, 2026, Albertsons expanded the claim into a demand for lost shareholder value. Kroger countersued in 2025, arguing that Albertsons itself undermined the regulatory strategy and therefore forfeited the fee.
Vice Chancellor Lori W. Will, a former partner at Wilson Sonsini Goodrich & Rosati who joined the Court of Chancery in 2021, is presiding, according to Grocery Dive. The Court of Chancery has no juries. Will alone will weigh the testimony, the documents and the competing expert damages models, and she will issue a written opinion explaining her reasoning.
That format matters for both companies. Chancery opinions on merger contracts are read closely by deal lawyers across the country, so whatever Will writes about the meaning of a “best efforts” or “any and all actions” clause will travel well beyond grocery.
How did Albertsons reach a claim of more than $8 billion?
The headline number combines several separate claims, and the reported totals differ slightly depending on how interest and taxes are counted. Reuters describes the demand as more than $8 billion. Grocery Dive, reading the same pretrial brief, puts the full range between about $7.5 billion and $9.3 billion.
| Component | Amount sought | What it represents |
|---|---|---|
| Lost shareholder premium | $5.43bn–$6.88bn | The premium Albertsons shareholders would have received had the deal closed, including interest |
| Termination fee | $600m | The fee written into the 2022 merger agreement, which Albertsons has sought since December 2024 |
| Tax adjustments | $1.4bn–$1.7bn | A gross-up to cover taxes Albertsons says it would owe on any award |
| Prejudgment interest and fees | At least $75m | Interest and related costs on the fee and other amounts |
| Total claimed | About $7.5bn–$9.3bn | Reported by Reuters as “more than $8 billion” |
The largest single item, the lost premium, is also the hardest to win. It is not money Albertsons the company lost; it is value its stockholders would have captured at closing. Whether a target company can recover its shareholders’ lost premium from a buyer is a contested question in Delaware law, and the merger agreement’s own language on that point is likely to be argued line by line.
The $600 million fee is a different kind of claim. It is a fixed amount the parties agreed in advance would be owed if the deal failed on antitrust grounds, and Albertsons has been asking for it since the day it walked away. Kroger’s defense to the fee is narrower: it argues Albertsons breached its own obligations and therefore lost its right to collect.
That distinction drives most analyst forecasts. Supermarket News, citing a Bloomberg Intelligence analysis, reports that Albertsons would need to prove Kroger willfully violated the merger agreement to collect damages beyond the $600 million fee. Bloomberg Intelligence has put the probability at 70% that Kroger ends up owing the fee for a non-willful breach, a result that would leave the multibillion-dollar premium claim unpaid.
What does Albertsons say Kroger did wrong?
Albertsons’ core argument is that Kroger promised more than it delivered. According to Reuters, Albertsons says the merger agreement required Kroger to take “any and all actions” needed to secure antitrust clearance, including selling up to 650 stores if regulators demanded it. An Albertsons spokesperson summarized the claim in a statement quoted by Grocery Dive: “Kroger made a promise and broke it.”
The complaint and pretrial filings, as reported by Reuters, Grocery Dive and Supermarket News, describe several specific failures:
- Minimal divestitures: Albertsons says Kroger designed its store-sale packages to protect the combined company’s profitability rather than to win clearance, offering what Grocery Dive describes as “successive lowball offers” to regulators.
- Cherry-picked stores: Albertsons alleges Kroger kept the more valuable stores and banners and tried to divest its lowest-performing locations.
- The buyer choice: Albertsons says Kroger undermined SpartanNash’s ability to finance a bid and then chose C&S Wholesale Grocers, whose offer Albertsons calls riskier but more lucrative for Kroger. C&S later acquired SpartanNash in 2025.
- Ignored regulator signals: Supermarket News reports Albertsons argues Kroger disregarded FTC guidance on divestitures and did not adequately engage state attorneys general.
- A $400 million bonus pool: Reuters reports Albertsons says Kroger created a $400 million executive bonus pool that rewarded senior managers for taking an aggressive line with regulators.
Filings unsealed in 2025 also showed that Albertsons had offered Kroger about $800 million, tied to a potential settlement with regulators or favorable court rulings, to improve the deal’s chances. Albertsons argues Kroger’s leadership did not take up the offer.
The shredded notes
Two weeks before trial, a pretrial filing added an evidence dispute. BoiseDev first reported on October 5 that Albertsons accused Kroger of being “reckless” in allowing a key economic consultant to destroy notes. According to Supermarket News, Albertsons alleges that Dr. David Weiskopf of Compass Lexecon, who worked on the merger’s economic analysis including which stores Kroger would sell, shredded his handwritten notes from calls with Kroger and its antitrust counsel.
Weiskopf said shredding notes was his normal practice. Albertsons argues Kroger “did nothing to preserve Compass Lexecon documents until October 2025,” and that it was “consciously aware” of the risk of losing evidence. Courts can draw inferences against a party that fails to preserve relevant material, so how Will treats the missing notes could affect how she reads the rest of the record on Kroger’s divestiture strategy.
How is Kroger defending itself?
Kroger’s position is that it did what the contract required and that the merger failed because regulators were determined to stop it. In its trial filings, as reported by Reuters, Kroger says the Biden administration wanted more than 650 stores sold, above the maximum the merger agreement obliged Kroger to divest. It also argues that the courts defined the grocery market too narrowly by excluding Amazon, Costco and other competitors.
Kroger points to the resources it spent as evidence of good faith. According to Reuters, the company says it invested more than $1 billion and tens of thousands of employee and adviser hours in the effort to close. A company that spent that much, Kroger argues, did not willfully breach anything. Kroger also says that Albertsons’ immediate termination in December 2024 cut off its ability to appeal the court rulings.
The Susan Morris counterclaim
Kroger’s sharpest argument concerns Susan Morris, who was Albertsons’ chief operating officer during the merger and is now its chief executive. Kroger says Albertsons forfeited the termination fee in part because of unauthorized communications between Morris and C&S Wholesale Grocers, which Kroger says undermined the FTC’s view of the divestiture plan.
Albertsons rejects that account. According to Grocery Dive, Albertsons says Morris spoke with C&S about possibly becoming chief executive of the retail business C&S would have run after the divestiture, not about any “theorized conspiracy.” Albertsons says there is no evidence that Morris shared sensitive information. Morris is listed as a potential witness, which means the current Albertsons CEO could be cross-examined about her conduct during the deal.
Kroger has also argued that Albertsons cannot prove causation: even if Kroger had offered more stores, Kroger says, the regulators and courts would still have blocked the deal. That causation point is central to the damages claim. If Will accepts that no achievable divestiture package would have satisfied the FTC and the states, the lost-premium theory weakens considerably.
Which executives will testify, and why does it matter?
The witness list reads like a roster of the people who ran both companies during the deal, most of whom have since moved on. According to Supermarket News, former Albertsons chief executive Vivek Sankaran was expected to testify first, followed by former Kroger chief executive Rodney McMullen. Albertsons general counsel Thomas Moriarty and the antitrust lawyers who advised each side, Ted Hassi for Albertsons and Michael Bernstein for Kroger, are also expected on the stand.
| Witness | Role during the deal | Role now |
|---|---|---|
| Vivek Sankaran | Albertsons CEO | Retired from Albertsons in 2025 |
| Rodney McMullen | Kroger chairman and CEO | Left Kroger in March 2025 after an ethics probe into personal conduct |
| Susan Morris | Albertsons chief operating officer | Albertsons CEO |
| Gary Millerchip | Kroger CFO | Costco CFO |
| Thomas Moriarty | Albertsons general counsel | Albertsons general counsel |
| Christine Wheatley | Kroger general counsel | Former Kroger general counsel |
Grocery Dive also lists Yael Cosset, a long-serving Kroger digital executive, among the expected witnesses, and Reuters says dozens of other potential witnesses include deal advisers, expert witnesses and current and former directors. McMullen’s testimony is likely to draw the most attention. Albertsons has argued in earlier filings that McMullen “micro-managed the merger from beginning to end,” and it unsuccessfully sought details of the personal conduct that led to his departure; the court did not order Kroger to disclose them.
The turnover itself is part of the story. Neither of the chief executives who signed the deal, McMullen at Kroger and Sankaran at Albertsons, is still in place. Both companies are now led by executives who inherited the litigation rather than created it, which may make settlement easier to discuss even as the trial proceeds.
What legal standard will decide the outcome?
Most of the trial turns on two questions: did Kroger breach its efforts obligation, and if so, was the breach willful? The first question decides whether Albertsons gets the termination fee. The second decides whether it can go further and claim the lost premium and other damages.
Delaware courts have treated “willful” or “knowing and intentional” breach as a demanding standard. In the 2008 Hexion v. Huntsman decision, the Court of Chancery described a knowing and intentional breach as a deliberate act that the party knew would breach the contract, regardless of whether it intended the breach as such. That framing means Albertsons does not need to prove that Kroger wanted the deal to fail; it needs to show that Kroger’s executives made choices they knew fell short of what the contract required.
What each side has to prove
- Albertsons must show that the merger agreement required more than Kroger did, that Kroger’s executives knew it, and that a stronger divestiture effort would probably have secured clearance.
- Kroger must persuade the court that its effort was reasonable given what regulators were demanding, or that Albertsons’ own conduct, including the Morris communications, excused Kroger from paying the fee.
- Both will rely on expert damages models; the gap between $5.43 billion and $6.88 billion in Albertsons’ own premium estimate shows how much depends on assumptions about interest, timing and share prices.
The court can also split the difference. A ruling that Kroger breached but not willfully would likely leave Albertsons with the $600 million fee plus interest, which is the outcome Bloomberg Intelligence currently sees as most probable. A finding of willful breach would open the door to a far larger award, but also to a longer appeal.
How have Kroger and Albertsons fared since the deal collapsed?
The two companies have taken visibly different paths since December 2024. According to Reuters, Kroger’s stock has gained about 4% since the merger was terminated, while Albertsons’ shares have fallen nearly 30%. Both trailed the S&P 500, which rose more than 25% over the same period.
| Metric | Kroger | Albertsons |
|---|---|---|
| CEO at signing (2022) | Rodney McMullen | Vivek Sankaran |
| CEO today | Greg Foran | Susan Morris |
| Share price since termination | Up about 4% | Down nearly 30% |
| Latest identical sales | Up 0.2% ex fuel (quarter to August 15, 2026) | Down 0.8% (quarter to September 12, 2026) |
| 2026 outlook | Sales outlook cut to 0.2–0.8% growth | Fiscal 2026 outlook withdrawn |
| Restructuring | About 3,000 corporate roles to go over three years | Full business review, results due by Q4 |
| Deal activity | Agreed to buy Giant Eagle for about $1.65bn | Banner portfolio under review |
Albertsons: a business review and a new executive chair
Albertsons arrives at trial under pressure. On October 13, 2026, the company withdrew its fiscal 2026 outlook and launched a comprehensive business review covering its cost structure, operating model, banner portfolio, individual markets and capital allocation. Second-quarter net income for the 12 weeks to September 12 fell 69% to $51.5 million, or 11 cents a share, on net sales of $18.89 billion, down 0.1%. Identical sales fell 0.8% for a second straight quarter, while digital sales rose 11%.
Adjusted EBITDA fell 7.6% to $784 million, according to The Shelby Report’s account of the results, and Albertsons said selling and administrative expenses rose partly because of higher legal costs tied to the terminated Kroger merger. The review follows the company’s decision in September to name Meg Whitman as Albertsons executive chair, a newly created role. Whitman said on the earnings call that performance “has fallen short” and that “Albertsons must become a simpler, more focused company that gets the basics right every day.” Morris said the review would address a cost structure the company “can no longer afford.”
For Albertsons, a large award would change the balance sheet. The company’s net debt ratio rose to 2.42 from 2.02 a year earlier, per the second-quarter release. Even the $600 million fee alone would be meaningful against quarterly adjusted net income of $179 million.
Kroger: a new CEO and deep corporate cuts
Kroger is in the middle of its own reset under Greg Foran, the former Walmart US and Air New Zealand executive. In a memo reported on October 12, Foran said Kroger had “more layers, more handoffs and more overhead than we need” and that the company plans to eliminate about 3,000 corporate roles over three years. Reuters and other outlets put that at roughly 37% of Kroger’s 8,200 corporate employees, on top of close to 1,000 corporate jobs cut in 2025.
Kroger’s sales momentum has also slowed. In September the company reported identical sales without fuel up just 0.2% and cut its 2026 sales outlook to 0.2–0.8% growth, even as adjusted earnings per share beat expectations. A multibillion-dollar judgment would not threaten Kroger’s solvency, but it would compete directly with the price investment and technology spending Foran has promised to fund from the corporate cuts.
What does the trial mean for grocery M&A and antitrust?
The trial is a contract case, not an antitrust case, but its outcome will shape how future retail mergers are negotiated. The Kroger and Albertsons agreement included a divestiture ceiling of 650 stores and a $600 million fee payable if the deal failed on antitrust grounds. Buyers and targets in future deals will read Will’s opinion to learn what an efforts clause obliges a buyer to do once regulators push past the negotiated ceiling.
| Blocked retail deal | Year ended | Fee or payment | Outcome |
|---|---|---|---|
| Staples / Office Depot | 2016 | $250m paid by Staples to Office Depot | Paid after a federal court blocked the deal |
| Amazon / iRobot | 2024 | $94m paid by Amazon to iRobot | Paid after the deal was abandoned amid EU opposition |
| Kroger / Albertsons | 2024 | $600m claimed; Kroger disputes it owes anything | On trial in Delaware; more than $8bn claimed in total |
In the earlier cases, the fee was paid and the matter ended. Kroger and Albertsons are unusual because the buyer is contesting the fee itself and the target is claiming several times the fee on top of it. A ruling that lets a target recover its shareholders’ lost premium for a buyer’s insufficient regulatory effort would raise the stakes of every efforts clause; a ruling that caps recovery at the fee would reassure buyers that the fee is their maximum exposure.
Kroger has also been able to return to dealmaking on a smaller scale. In July 2026 it agreed to acquire Giant Eagle for about $1.65 billion, its first major acquisition since the Albertsons deal collapsed. Meanwhile, state lawmakers have kept pushing their own competition rules, including California’s COMPETE Act, which takes effect January 1, 2027 and adds a new state-level monopoly standard that retailers operating in California will need to account for.
Kroger’s argument that courts defined the grocery market too narrowly, by excluding Amazon, Costco and other channels, is not before Will as a question of antitrust law. But the record built in Delaware will document in unusual detail how a large grocer negotiated with antitrust enforcers, which store-level data it used, and where it drew the line. That record is likely to be cited in future merger reviews regardless of who wins.
What happens to shoppers, workers and suppliers?
The trial will not reverse the merger or change store ownership. No court can revive the deal, and both companies are operating independently with their own restructuring plans. What the trial can change is how much cash moves from Kroger to Albertsons, and therefore how much each company has to spend on prices, wages and stores.
For Albertsons, a large award could fund price investment or debt reduction at a time when its own business review is examining which banners and markets to keep. For Kroger, a large payment would come out of the same pool of savings Foran has said will fund lower prices and frontline investment. Workers at both companies have watched the litigation closely; nearly 800 Kroger and Albertsons pharmacists in California voted in 2026 to authorize a strike over separate labor issues, a reminder that labor costs remain a pressure point for both grocers.
Suppliers and federal regulators are also watching grocery pricing more broadly. The Justice Department has opened a review of beef pricing that reaches eight grocers including Walmart, Amazon and Kroger, which keeps scrutiny on how large chains set prices whatever happens in Delaware. C&S Wholesale Grocers, which would have become a major retail operator through the divestiture and later bought SpartanNash, sits at the center of both sides’ narratives without being a party to the case.
What to watch over the next two weeks:
- McMullen’s testimony on how Kroger set its divestiture ceiling and how closely he directed the regulatory strategy.
- Morris’s testimony on her communications with C&S, which is central to Kroger’s fee defense.
- Expert damages testimony on the lost premium, which will determine whether the claim lands nearer $5.43 billion or $6.88 billion if Albertsons prevails.
- Any ruling on the Compass Lexecon notes, including whether Will draws an adverse inference against Kroger.
- Settlement signals, since both new management teams have reasons to cap the uncertainty before a ruling.
When will there be a decision?
The trial itself is scheduled for about two weeks, which would put the close of evidence in early November 2026. Post-trial briefing and closing arguments in the Court of Chancery typically follow over several weeks, and Reuters notes that rulings often take months after trial ends. A decision before the first quarter of 2027 would be fast by Chancery standards for a case of this size.
After the ruling, either side can appeal to the Delaware Supreme Court, which would add further months. Albertsons has said it expects to present an updated financial framework on its fourth-quarter earnings call and to hold an investor day in spring 2027, so investors may see the company’s long-term plan before they see a final answer on the Kroger money. The companies could also settle at any point, as many Chancery merger disputes do once the testimony has shown each side the strength of the other’s case.
Frequently asked questions
When did the Albertsons v. Kroger trial start?
The trial began on Monday, October 19, 2026, in the Delaware Court of Chancery in Wilmington. It is a bench trial before Vice Chancellor Lori W. Will and is scheduled to last about two weeks.
How much is Albertsons asking Kroger to pay?
Albertsons is seeking more than $8 billion, according to Reuters. Its pretrial brief claims a lost shareholder premium of $5.43 billion to $6.88 billion, the $600 million termination fee, $1.4 billion to $1.7 billion in tax adjustments and at least $75 million in interest and fees, for a total of roughly $7.5 billion to $9.3 billion.
Why did the Kroger and Albertsons merger fail?
The FTC and several states sued to block the $24.6 billion deal in 2024. In December 2024, a federal court in Oregon and a state court in Washington ruled against the companies, and Albertsons terminated the agreement. Each company now blames the other for failing to win approval.
What is Kroger’s defense?
Kroger says it met its obligations, spent more than $1 billion pursuing approval, and that regulators wanted more than the 650 stores the agreement required it to sell. It also argues Albertsons forfeited the termination fee because of unauthorized communications between Susan Morris, now Albertsons’ CEO, and C&S Wholesale Grocers.
Will Kroger have to pay the $600 million termination fee?
That is the most likely contested outcome. Bloomberg Intelligence puts the odds at 70% that Kroger owes the fee for a non-willful breach. Damages beyond the fee would likely require Albertsons to prove Kroger’s breach was willful.
Who is testifying at the trial?
Expected witnesses include former Albertsons CEO Vivek Sankaran, former Kroger CEO Rodney McMullen, current Albertsons CEO Susan Morris, former Kroger CFO Gary Millerchip (now Costco’s CFO), Albertsons general counsel Thomas Moriarty, former Kroger general counsel Christine Wheatley, and the antitrust lawyers who advised both companies.
Does the trial affect Kroger or Albertsons stores?
No. The merger cannot be revived, and both chains continue to operate independently. The trial only decides whether Kroger owes Albertsons money, which could influence how much each company can invest in prices, stores and staff.
When will the court rule?
A ruling is unlikely before the end of 2026. Chancery decisions often follow months after trial, and either side can appeal to the Delaware Supreme Court. The companies can also settle at any time.