Sale of Joliet Jewel-Osco store in doubt as Kroger merger collapses

Joliet — The sale of the Jewel-Osco store in Joliet and other suburban locations is not likely to happen for the foreseeable future after the proposed merger between supermarket chains Kroger and Albertsons was canceled this week following delays Tuesday by two federal injunctions.

As reported by The Associated Press, Albertsons – the parent company of Jewel-Osco – has pulled out of the $24.6 billion deal and has filed a lawsuit against Kroger for termination and legal fees amounting to $600 million.

Kroger has reportedly called the lawsuit “baseless.”

The AP reported that the deal fell apart after U.S. District Court Judge Adrienne Nelson out of Portland, Oregon, issued a preliminary injunction blocking the merger Dec. 10 at the urging of the Federal Trade Commission.

The FTC requested that the injunction be put in place so it could further consider the implications of the deal, which would have been the largest grocery merger in U.S. history.

Critics of the merger expressed concerns that the combined chain would hurt employees and customers by creating a lack of competition in large areas of the country, driving prices up and wages down, while the companies have argued that it would allow them to compete more strongly against large retailers such as Walmart and Amazon.

In addition to Nelson’s ruling, Seattle-based Judge Marshall Ferguson issued a permanent injunction to bar the merger in Washington state on the grounds that it would “lessen competition in the state,” according to The AP

The collapse of the merger prevents the sale for the time being of multiple Jewel-Osco and Mariano’s locations throughout suburban Will and Cook counties to C&S Wholesale Grocers, including the Jewel-Osco at 1537 N. Larkin Ave. in Joliet.

Although C&S assured the Joliet City Council earlier this year that it would not close the store or alter its branding, federal regulators were reportedly concerned about the company’s ability to manage the additional 579 stores in the long term, and feared the Piggly Wiggly parent company eventually would shutter stores.

During the court proceedings, The AP reported that Albertsons had warned it would possibly need to lay off employees, close stores or exit markets if the deal did not go through. However, as of Dec. 11, there has been no formal announcement of those plans or what regions or stores they would potentially affect.

Kroger and Albertsons compete directly in 21 regions outside of the Chicago-area market and employ a combined 710,000 people.