Bloomberg reports that Kroger CEO Rodney McMullen is "committed to hunkering down for a long legal battle if US regulators attempt to block its $24.6 billion acquisition of Albertsons Cos."
McMullen said yesterday that "usually you wouldn’t commit in advance to litigate. In this case we both committed to litigate in advance."
Bloomberg writes that this statement does not mean that Kroger and Albertsons expect their proposed merger to be rejected by the Federal Trade Commission (FTC); McMullen said that the process is “where we thought we would be at this time."
The story goes on:
"'We believe very strongly that we had the best professional advisers, and Albertsons had the best professional advisers, on being able to find a viable solution,' McMullen said. A successful outcome would mean that 'the combined company will create the right environment and lower prices, and we’ll be able to divest stores to somebody that’s good' … McMullen said he believes there’s a 'meaningful number' of potential buyers who could purchase stores without taking on too much debt, including private equity companies and existing retailers."
- KC's View:
I don't know much about how the process works, but I'm a little surprised that Kroger and Albertsons are willing to wave a red flag in front of a bull - they're essentially telling the FTC that regardless of how and why it rules on the proposed deal, they're prepared to go the mattresses to make it happen.
I'm not sure if this will have any impact on how the FTC decides on this. But I guess discretion is out the window.