(Reuters) -U.S. grocery chain Kroger countersued rival Albertsons on Tuesday, escalating a legal fight between the two companies following the demise of their proposed $25 billion merger that was blocked by courts in December.
Albertsons terminated the bid to merge immediately after the deal was blocked and sued Kroger, alleging a breach of contract that led to the deal’s demise.
The formal termination ended a two-year effort by the grocery chains to combine. Regulators had noted that the deal would lead to higher prices for shoppers.
Albertsons was engaging in a campaign with divestiture buyer C&S Wholesale Grocers to pursue its own regulatory strategy, according to Kroger.
In December, Albertsons asked for billions of dollars in damages along with a $600 million termination fee. Kroger had called the claims baseless.
“As a result of its misconduct, Albertsons is not entitled to the $600 million termination fee … nor is Albertsons entitled to the other damages it seeks,” Kroger said.
Albertsons did not immediately respond to a request for comment.
(Reporting by Ananya Mariam Rajesh in Bengaluru and David Gaffen in New York; Editing by Shounak Dasgupta)
