Opinion Kroger Goes From Supermarket to Superpower HEAD TOPICS

Opinion Kroger Goes From Supermarket to Superpower

10/22/2022 10:19:00 AM

Is the corporate media doing a good enough job of explaining the machinations and implications of a merger between the nation' s two largest grocery chains

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Common Dreams

Is the corporate media doing a good enough job of explaining the machinations and implications of a merger between the nation's two largest grocery chains? Is the corporate media doing a good enough job of explaining the machinations and implications of a merger between the nation's two largest grocery chains? The Wall Street Journalthat looks at the merger from the perspective of how it will profoundly affect digital marketing.Sometimes what is absent is as important or more important than what is present. And sometimes the easiest form of hackery that any writer could fall into is hackery by omission, failing to dig quite deep enough to uncover the whole picture.  To start, let's talk about the details of the proposed merger. The simple version is Kroger will buy Albertsons for around $20 billion while also taking on Albertsons' $5 billion in debt. This has generally been reported as a purchase price of roughly $25 billion. Technically more complicated, but a fair description. Read more:
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WMC SheSource - Women’s Media Center from The Wall Street Journal that looks at the merger from the perspective of how it will profoundly affect digital marketing.Posted.'Black Panther: Wakanda Forever' Eyeing Second-Highest Opening Of 2022 After 'Doctor Strange 2' “Whatever happens to my career going forward from this point on, I owe most of it to the ‘Save Daredevil’ campaign,” Coz said.A scene from the 2002"Beautiful" music video. Sometimes what is absent is as important or more important than what is present. And sometimes the easiest form of hackery that any writer could fall into is hackery by omission, failing to dig quite deep enough to uncover the whole picture.  To start, let's talk about the details of the proposed merger.” Cox also has great love for the role. The simple version is Kroger will buy Albertsons for around $20 billion while also taking on Albertsons' $5 billion in debt. This has generally been reported as a purchase price of roughly $25 billion.  The original version shows people battling eating disorders, body dysmorphia, racism and homophobia. Technically more complicated, but a fair description. I’ve had such fun with it. Where it gets trickier is below the headline figures. As Matt Stoller reported on his Substack “Big” , one provision is a $4 billion dollar dividend to be paid out by Albertsons this coming Monday. That is one-fifth of the price Kroger will pay to acquire the company.” Must Read Stories. It's 30% of the firm's entire market capitalization of roughly $15 billion. Children begin to wipe off their makeup, put away their phones and go outside. And this is a dividend, not a stock buyback. At least in a stock buyback, there's something coming back in return. With a dividend, the existing stockholders will get a huge payday off the bat. As my CEPR colleague Eileen Appelbaum pointed out , this is draining the company's coffers in a way that could deliberately make them less competitive. Basically, as Eileen points out, this dividend could well jeopardize Albertsons' financial health, which then opens up the possibility that Kroger can argue to the Federal Trade Commission (FTC) that the merger has to go through or the second largest American supermarket chain will fail, potentially causing food supply havoc.” If you are struggling with suicidal thoughts or are experiencing a mental health crisis and live in New York City, you can call 1-888-NYC-WELL for free and confidential crisis counseling. Even in a less extreme version, Kroger can argue that it can't be causing that much excess concentration if its competitor is struggling to make ends meet anyway. The corporate lawyers will be able to say,"Look, if we don’t have really strong economies of scale, like what the merger will achieve, we can't stay in business." Far less realistic arguments have been vindicated by conservative judges lately. The biggest payday from the dividend will go to Cerberus Capital Management, a private equity firm named after the dog that stands guard in the ancient Greek underworld of Hades, not exactly inspiring confidence in their magnanimity. Cerberus owns 29% of Albertsons, which means they stand to get around $1. 16 billion. And, again, they get that payout in a couple of days, regardless of the end result of the merger. It's not like they won't already make a killing if the sale goes through. As Forbes reported , Cerberus will get $7.1 billion if the sale goes through. The wildest part of all of this is that pretty much everyone missed it. No mention of it in any of the major papers. That is, to put it mildly, nuts. This is a story that could literally impact the availability of food and other basic necessities across the country and the key to that story is something that reporters have nothing to say about. There's another key part of the deal that is also intended to head off FTC regulation. Kroger and Albertsons included a divestiture in the initial deal, which is unusual; generally, corporations will agree to divestitures in consent agreements with the antitrust regulators. This maneuver is basically designed to make the companies look very reasonable in the event that the deal goes to court to settle an FTC challenge. In brief, the companies would spin off a company with between 100 and 375 stores to act as a competitor. Here's the problem: the FTC tried this with the last big grocery merger when Albertsons bought Safeway. The companies offloaded more than 100 stores to a regional chain in the Pacific Northwest, Haggen. But that firm couldn't handle the massive increase in logistical complexity and management responsibilities, going bankrupt in short order. Albertsons then bought back a few dozen stores (I'd bet the best ones they offloaded) at a massive discount. For more on this, check out David Dayen's .