TheDeal.com reports that Kroger Co.'s proposed acquisition of 18 Raley's supermarkets in Las Vegas continues to face a tougher-than-expected review by the US Federal Trade Commission (FTC).
It is possible, though not a foregone conclusions, that investigators will subpoena more details about the transaction. Some sense of what the government will do should be reached in the next two weeks, according to insiders.
The problem is that Raley's entered the Las Vegas market in 1999 by acquiring 18 Albertsons stores that the company had to sell in order to get its acquisition of American Stores approved by the government. The FTC had rejected the possibility of Albertsons selling the units to Kroger for competitive reasons.
So now, if Raley’s were to sell the stores to Kroger, it would require the FTC to approve a sale it previously rejected.
Antitrust experts told TheDeal.com that the decision reached by the FTC will illustrate whether the agency intends to maintain a “hard line on retail mergers or is willing to soften its position and permit greater consolidation.”
It is possible, though not a foregone conclusions, that investigators will subpoena more details about the transaction. Some sense of what the government will do should be reached in the next two weeks, according to insiders.
The problem is that Raley's entered the Las Vegas market in 1999 by acquiring 18 Albertsons stores that the company had to sell in order to get its acquisition of American Stores approved by the government. The FTC had rejected the possibility of Albertsons selling the units to Kroger for competitive reasons.
So now, if Raley’s were to sell the stores to Kroger, it would require the FTC to approve a sale it previously rejected.
Antitrust experts told TheDeal.com that the decision reached by the FTC will illustrate whether the agency intends to maintain a “hard line on retail mergers or is willing to soften its position and permit greater consolidation.”
- KC's View:
- We think the deal will go through, in part because Las Vegas is such a fast-growing region that there are bound to be new competitors going in there. It doesn’t strike us as a city light on competition…
