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Judge blocks Albertsons-Kroger $25 billion supermarket merger

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Small Bite
December 11, 2024

Hey Small Biters,

A U.S. District Judge in Oregon has blocked a $25 billion-bid by supermarket giant Kroger to take over rival Albertsons after ruling that the Federal Trade Commission's concerns about the merger's impact on market consolidation were valid.

Judge Adrienne Nelson said Tuesday afternoon that a merger between the two companies would end up harming consumers.

The two companies "engage in substantial head-to-head competition and the proposed merger would remove that competition," Ferguson wrote. As a result, the proposed merger would likely to lead to outcomes that "unilaterally" harm consumers, and is thus "presumptively unlawful. "

Walgreens could be sold to private-equity firm Sycamore Partners early next year, taking the publicly traded company off the market, according to a story published Tuesday in the Wall Street Journal. 

The article, which cites unnamed sources, noted that if the deal is successful, Sycamore would sell off parts of the company or work with partners in the deal. 

Walgreens Boots Alliance, headquartered in Deerfield, Ill., has been eyed by private-equity firms for years and was targeted by private-equity firm KKR in 2019. At that time, Walgreens had a market capitalization of more than $56 billion and held almost $17 billion in debt. 

The S&P 500 slumped for the second straight day, dropping 0.3%. The Nasdaq 100 also gave back 0.3%, while the Russell 2000 fell 0.4%.

Real estate, tech, and materials were the worst-performing S&P 500 sector ETFs, each off more than 1%. Communications services was at the top of the leaderboard, thanks to Alphabet.

Google GOOGL $186.20 (5.58%) was the best-performing Magnificent 7 stock, up over 5% after its quantum computing breakthrough. While other quantum computing-linked stocks initially fell on the news, most recovered later. Notably, Rigetti Computing RGTI $6.93 (45.40%) spiked after announcing that a joint project with Quantum Machines that used AI to automate how a quantum computer is calibrated was successful.

Walgreens Boots Alliance WBA $10.37 (17.85%) soared following reports that the embattled pharmacy chain may soon be acquired, making it the best-performing S&P 500 constituent.

A judge blocked Kroger KR $60.75 (5.16%)’s acquisition of Albertsons ACI $18.49 (-2.32%), sending the former higher and the latter lower.

Homebuilders had a rough day after Toll BrothersTOL $145.80 (-6.95%)’ mediocre earnings report, with the iShares US Home Construction ETFITB $117.23 (-2.27%) down 2.3%.

TSMC TSM $192.32 (-3.60%) tumbled 3.6% despite announcing massive sales growth in November

Oracle ORCL $177.48 (-6.68%) tanked 6.7% after posting lower-than-expected sales with an underwhelming earnings guidance, its worst day since the company released quarterly results one year ago.

Moderna MRNA $41.54 (-9.09%) was the worst performer in the S&P 500 with the drugmaker facing eviction from the Nasdaq 100.

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