Kroger to merge with Albertsons?

[storewanderer]

I think with a legitimate store divest program including entire divisions (including associated warehouses at a minimum- if manufacturing is not included then agreements for manufacturing to provide goods to the divested stores using current costing method for 10 years) and actual qualified buyers this merger may have a shot.

The other thing that some on that nomerger website should be concerned about is what happens to Albertsons if this merger doesn't go through...

Albertsons has spent SIGNIFICANTLY more on lobbying than Kroger to get this thing rammed through.

I don't think Kroger's lobbying effort with Boner will go anywhere. It is likely to hurt their cause more than it will help. Watch the lobbying activity by Albertsons. That is where the real stuff is going on. Kroger and Boner is a side show to poke at the unions.

Now I am very curious about the 2 line news article that basically makes it sound as if store divests actually occurring are imminent. Is this a new tactic companies use with the FTC? Since 7-Eleven did it with Speedway? Just self select what to divest, do it and close your deal whenever you feel like it. You know what, why even have FTC at all if they allow companies to get away with that sort of thing (they allowed 7-Eleven and Speedway to- never required they divest anything else).

[jamcool]

More likely Ahold buys Albertsons if the merger with Kroger doesn’t go thru…with Kroger buying overlapping East Coast assets. The Canadian ops aren’t interested in US operations, the Mexican ones don’t have the money or the knowledge to operate across the country.

[veteran+]

So strange that most of the lobbying $$$$$ is from Albertsons.

So they pay out billions of dollars to shareholders and spend mucho money on lobbying! It's like they are burning through cash for what? What's the end game pro or con merger?

Suspicious...........................

[marshd1000]

More likely Ahold buys Albertsons if the merger with Kroger doesn’t go thru…with Kroger buying overlapping East Coast assets. The Canadian ops aren’t interested in US operations, the Mexican ones don’t have the money or the knowledge to operate across the country.

I still kind of wonder if Pattison Foods Group from Vancouver, could acquire some Washington State assets? They have Roth’s in the Salem, OR area and Chuck’s Produce and Street Market in Vancouver, WA. So acquiring QFC would be a great way to fill that gap with no real overlap! Also, why not acquire Haggen, then the gap in NW Washington would be filled. There would only be one overlap store with QFC in Starwood, WA. Or if Kroger keeps QFC, Haggen and Safeway in Washington, then I could see selected divestitures where the stores could become Save On Foods!

[ClownLoach]

I think with a legitimate store divest program including entire divisions (including associated warehouses at a minimum- if manufacturing is not included then agreements for manufacturing to provide goods to the divested stores using current costing method for 10 years) and actual qualified buyers this merger may have a shot.

The other thing that some on that nomerger website should be concerned about is what happens to Albertsons if this merger doesn't go through...

Albertsons has spent SIGNIFICANTLY more on lobbying than Kroger to get this thing rammed through.

I don't think Kroger's lobbying effort with Boner will go anywhere. It is likely to hurt their cause more than it will help. Watch the lobbying activity by Albertsons. That is where the real stuff is going on. Kroger and Boner is a side show to poke at the unions.

Now I am very curious about the 2 line news article that basically makes it sound as if store divests actually occurring are imminent. Is this a new tactic companies use with the FTC? Since 7-Eleven did it with Speedway? Just self select what to divest, do it and close your deal whenever you feel like it. You know what, why even have FTC at all if they allow companies to get away with that sort of thing (they allowed 7-Eleven and Speedway to- never required they divest anything else).

They're going to follow the 7-Eleven Speedway model to the T, except for closing Pre approval.

Basically they are going to start by putting selected locations on the block and selling them to competitors either a store at a time (in surgical markets like SoCal where overlap is a mess) or in an entire group (like the more problematic Nevada and Arizona where a KR store is seemingly always on the other corner from an ACI store). This will be the wave 1 of divests and it is likely imminent that the "for sale" list gets posted of selected ACI and KR stores. The list was made cooperatively as previously disclosed - it isn't collusion if you announce it and the government doesn't immediately say no.

The divestitures are just straightforward sales to competitors. The SpinCo idea was BS from the start and they never intended to actually go through with it unless they were forced to - which of course by design the SpinCo would quickly degenerate into a group of zombie stores since they are not willing to part with any non-retail assets (warehouses, manufacturing plants, etc.). I'm betting that the rampant speculation on banners like Albertsons itself here is misguided too. They won't let any banner go unless they have a convenient need to sell it entirely (QFC although they'll surgically pick and choose what sells vs converts to Safeway, discount banners Rvler FoodsCo and Food4Less). Aside from QFC which could go anywhere I suspect that the SpinCo proposal would primarily be the discount brands and have a stated intent to convert other stores lumped in to one of those formats. They get to claim they've created an "agile new competitor focused on driving down food prices in the community" and who could say no to that?

As far as divesting without FTC approval? That's exactly what they've indicated they would do from day one, at least to start the process. And everyone is probably better off with the companies doing this vs. the FTC or state AGs because they love to point out problems like the Haggen debacle... But they are just as responsible for that failure as ACI.

So it's going to go down like this.

Divest Wave 1: sale to competitors self selected obvious overlaps (even fixing some overlaps that survived the ACI merger like Vons across the street from Albertsons). Groups like ACI southwest coupled with surgically selected in SoCal and PNW. They'll mainly be less desirable stores coupled with bad landlord relationship stores threatened with redevelopment. These are stores that if there was no opposition at all to the merger they'd just close them right away unless the rent was cheap. Intent is to get rid of what they would anyway at a profit and move to localized discussions with AGs etc. on any other situation they find undesirable.

Divest Wave 2: these will be additional stores added to the sale to competitor list which are selected through negotiations with a state AG or other governmental agency. These probably will be "better" stores which they would rather keep but they are willing to let them go in an effort to make the deal happen.

Divest Wave 3 (Possible SpinCo): this will be any store they couldn't find a buyer for in Wave 1 and Wave 2. They will throw the discount brands in here as a token as well. I would expect to see anything in this bucket rebranded to the discount banner and format at KR/ACI expense. This group will be sold either entirely as one transaction to one buyer, or it will become SpinCo the "agile new competitor" with a price impact format so they can claim they're working to drive down prices. They will not include any facilities with this either, but if it becomes a spin they may be forced to source and sign up long term deals with other suppliers before the deal is done (Unified or whoever, honestly I'm not familiar with all of them). With appropriate long term contracts they should have a positive balance sheet as promised. Kroger may be forced to financially backstop this chain against failure for ten years unless it is acquired or "negligently managed" . In reality they're just creating a new competitor to the growing threat of Winco and giving it to ACI shareholders in exchange for their vote on the final merger deal.

[ClownLoach]

So strange that most of the lobbying $$$$$ is from Albertsons.

So they pay out billions of dollars to shareholders and spend mucho money on lobbying! It's like they are burning through cash for what? What's the end game pro or con merger?

Suspicious...........................

Apollo's involvement should automatically raise suspicion. They are likely the engine behind this process. They don't care if the entire thing gets parted out as long as they make a profit and they get a piece of the financing. They'll issue credit to competitors who want to buy stores but don't have the cash just to get their tentacles into them. Also how much of the ACI debts are now held by Apollo? That is how they make their money, they get financially involved and refinance debts themselves at higher interest rates for larger credit lines. How much are you willing to bet that Apollo is going to be the main source of financing for the newly merged Kroger's credit needs? They buy and sell companies but hold the paper on their loans long after they sell... That's how they really make their money. It's probably more profitable long term for them to push this merger through and get their tentacles into Kroger's fat debt holdings even if it means their entire ACI investment gets sold in pieces. And if they don't get it through they still hold the paper on ACI loans, and might have negotiated their way into Kroger loans anyway.

[ClownLoach]

More likely Ahold buys Albertsons if the merger with Kroger doesn’t go thru…with Kroger buying overlapping East Coast assets. The Canadian ops aren’t interested in US operations, the Mexican ones don’t have the money or the knowledge to operate across the country.

The Nordstrom Canada closing reminded me about the reason why we won't see Canadian companies acquire anything here. The Canadian dollar continues to be very weak and is holding around 73 cents to a US dollar. Right now it is very expensive for Canadian companies to buy anything in America. If a bidding war took place in any form it would require an automatic FX headwind overpay of 27% due to the exchange rate. Loblaw and Sobey's aren't coming to buy anything.

[arizonaguy]

I think with a legitimate store divest program including entire divisions (including associated warehouses at a minimum- if manufacturing is not included then agreements for manufacturing to provide goods to the divested stores using current costing method for 10 years) and actual qualified buyers this merger may have a shot.

The other thing that some on that nomerger website should be concerned about is what happens to Albertsons if this merger doesn't go through...

Albertsons has spent SIGNIFICANTLY more on lobbying than Kroger to get this thing rammed through.

I don't think Kroger's lobbying effort with Boner will go anywhere. It is likely to hurt their cause more than it will help. Watch the lobbying activity by Albertsons. That is where the real stuff is going on. Kroger and Boner is a side show to poke at the unions.

Now I am very curious about the 2 line news article that basically makes it sound as if store divests actually occurring are imminent. Is this a new tactic companies use with the FTC? Since 7-Eleven did it with Speedway? Just self select what to divest, do it and close your deal whenever you feel like it. You know what, why even have FTC at all if they allow companies to get away with that sort of thing (they allowed 7-Eleven and Speedway to- never required they divest anything else).

They're going to follow the 7-Eleven Speedway model to the T, except for closing Pre approval.

Basically they are going to start by putting selected locations on the block and selling them to competitors either a store at a time (in surgical markets like SoCal where overlap is a mess) or in an entire group (like the more problematic Nevada and Arizona where a KR store is seemingly always on the other corner from an ACI store). This will be the wave 1 of divests and it is likely imminent that the "for sale" list gets posted of selected ACI and KR stores. The list was made cooperatively as previously disclosed - it isn't collusion if you announce it and the government doesn't immediately say no.

The divestitures are just straightforward sales to competitors. The SpinCo idea was BS from the start and they never intended to actually go through with it unless they were forced to - which of course by design the SpinCo would quickly degenerate into a group of zombie stores since they are not willing to part with any non-retail assets (warehouses, manufacturing plants, etc.). I'm betting that the rampant speculation on banners like Albertsons itself here is misguided too. They won't let any banner go unless they have a convenient need to sell it entirely (QFC although they'll surgically pick and choose what sells vs converts to Safeway, discount banners Rvler FoodsCo and Food4Less). Aside from QFC which could go anywhere I suspect that the SpinCo proposal would primarily be the discount brands and have a stated intent to convert other stores lumped in to one of those formats. They get to claim they've created an "agile new competitor focused on driving down food prices in the community" and who could say no to that?

As far as divesting without FTC approval? That's exactly what they've indicated they would do from day one, at least to start the process. And everyone is probably better off with the companies doing this vs. the FTC or state AGs because they love to point out problems like the Haggen debacle... But they are just as responsible for that failure as ACI.

So it's going to go down like this.

Divest Wave 1: sale to competitors self selected obvious overlaps (even fixing some overlaps that survived the ACI merger like Vons across the street from Albertsons). Groups like ACI southwest coupled with surgically selected in SoCal and PNW. They'll mainly be less desirable stores coupled with bad landlord relationship stores threatened with redevelopment. These are stores that if there was no opposition at all to the merger they'd just close them right away unless the rent was cheap. Intent is to get rid of what they would anyway at a profit and move to localized discussions with AGs etc. on any other situation they find undesirable.

Divest Wave 2: these will be additional stores added to the sale to competitor list which are selected through negotiations with a state AG or other governmental agency. These probably will be "better" stores which they would rather keep but they are willing to let them go in an effort to make the deal happen.

Divest Wave 3 (Possible SpinCo): this will be any store they couldn't find a buyer for in Wave 1 and Wave 2. They will throw the discount brands in here as a token as well. I would expect to see anything in this bucket rebranded to the discount banner and format at KR/ACI expense. This group will be sold either entirely as one transaction to one buyer, or it will become SpinCo the "agile new competitor" with a price impact format so they can claim they're working to drive down prices. They will not include any facilities with this either, but if it becomes a spin they may be forced to source and sign up long term deals with other suppliers before the deal is done (Unified or whoever, honestly I'm not familiar with all of them). With appropriate long term contracts they should have a positive balance sheet as promised. Kroger may be forced to financially backstop this chain against failure for ten years unless it is acquired or "negligently managed" . In reality they're just creating a new competitor to the growing threat of Winco and giving it to ACI shareholders in exchange for their vote on the final merger deal.

At the end of the day, I think Kroger is going to end up with Northern California, Chicago, the Mid Atlantic stores, the Northeastern stores, United (except for New Mexico), and some PNW / Intermountain / So Cal stores that don't overlap with Smith's, Fred Meyer or Ralph's.

Kroger isn't going to take the Austin Randalls stores and any Houston stores that overlap with an existing Kroger store will likely be divested.

Tom Thumb / Albertsons in DFW will likely be sold to HEB, Berkshire's or Berkshire Bros. There's a slight chance it also goes the SpinCo route and is eventually carved up over the next decade or so. Maybe Kroger keeps the Louisiana stores.

The SW division (AZ / NV / El Paso) is sold in its entirety to Save Mart. I also can see the New Mexico United operated Albertsons stores also going to Save Mart.

SpinCo takes the PNW, So Cal, Chicago, Mid Atlantic and Denver division divests. SpinCo will eventually close / sell stores piecemeal similar to how Albertsons LLC did. I'd expect this may be the way that Stater Bros gets some additional SoCal stores. I'd expect Denver will eventually be wound down similar to how Albertsons wound down its Denver division.

I am still very opposed to this merger. I believe that this will make Kroger a weaker competitor (if it goes through). The extra costs involved in this merger will mean that Kroger's pricing will increase and we'll see Kroger increase prices and close stores in order to remain solvent.

Consumers would be better off with Kroger remaining in its current state and Albertsons parting off its stores to multiple competitors versus Kroger absorbing everything that couldn't immediately get parted out.

[ClownLoach]

I think with a legitimate store divest program including entire divisions (including associated warehouses at a minimum- if manufacturing is not included then agreements for manufacturing to provide goods to the divested stores using current costing method for 10 years) and actual qualified buyers this merger may have a shot.

The other thing that some on that nomerger website should be concerned about is what happens to Albertsons if this merger doesn't go through...

Albertsons has spent SIGNIFICANTLY more on lobbying than Kroger to get this thing rammed through.

I don't think Kroger's lobbying effort with Boner will go anywhere. It is likely to hurt their cause more than it will help. Watch the lobbying activity by Albertsons. That is where the real stuff is going on. Kroger and Boner is a side show to poke at the unions.

Now I am very curious about the 2 line news article that basically makes it sound as if store divests actually occurring are imminent. Is this a new tactic companies use with the FTC? Since 7-Eleven did it with Speedway? Just self select what to divest, do it and close your deal whenever you feel like it. You know what, why even have FTC at all if they allow companies to get away with that sort of thing (they allowed 7-Eleven and Speedway to- never required they divest anything else).

They're going to follow the 7-Eleven Speedway model to the T, except for closing Pre approval.

Basically they are going to start by putting selected locations on the block and selling them to competitors either a store at a time (in surgical markets like SoCal where overlap is a mess) or in an entire group (like the more problematic Nevada and Arizona where a KR store is seemingly always on the other corner from an ACI store). This will be the wave 1 of divests and it is likely imminent that the "for sale" list gets posted of selected ACI and KR stores. The list was made cooperatively as previously disclosed - it isn't collusion if you announce it and the government doesn't immediately say no.

The divestitures are just straightforward sales to competitors. The SpinCo idea was BS from the start and they never intended to actually go through with it unless they were forced to - which of course by design the SpinCo would quickly degenerate into a group of zombie stores since they are not willing to part with any non-retail assets (warehouses, manufacturing plants, etc.). I'm betting that the rampant speculation on banners like Albertsons itself here is misguided too. They won't let any banner go unless they have a convenient need to sell it entirely (QFC although they'll surgically pick and choose what sells vs converts to Safeway, discount banners Rvler FoodsCo and Food4Less). Aside from QFC which could go anywhere I suspect that the SpinCo proposal would primarily be the discount brands and have a stated intent to convert other stores lumped in to one of those formats. They get to claim they've created an "agile new competitor focused on driving down food prices in the community" and who could say no to that?

As far as divesting without FTC approval? That's exactly what they've indicated they would do from day one, at least to start the process. And everyone is probably better off with the companies doing this vs. the FTC or state AGs because they love to point out problems like the Haggen debacle... But they are just as responsible for that failure as ACI.

So it's going to go down like this.

Divest Wave 1: sale to competitors self selected obvious overlaps (even fixing some overlaps that survived the ACI merger like Vons across the street from Albertsons). Groups like ACI southwest coupled with surgically selected in SoCal and PNW. They'll mainly be less desirable stores coupled with bad landlord relationship stores threatened with redevelopment. These are stores that if there was no opposition at all to the merger they'd just close them right away unless the rent was cheap. Intent is to get rid of what they would anyway at a profit and move to localized discussions with AGs etc. on any other situation they find undesirable.

Divest Wave 2: these will be additional stores added to the sale to competitor list which are selected through negotiations with a state AG or other governmental agency. These probably will be "better" stores which they would rather keep but they are willing to let them go in an effort to make the deal happen.

Divest Wave 3 (Possible SpinCo): this will be any store they couldn't find a buyer for in Wave 1 and Wave 2. They will throw the discount brands in here as a token as well. I would expect to see anything in this bucket rebranded to the discount banner and format at KR/ACI expense. This group will be sold either entirely as one transaction to one buyer, or it will become SpinCo the "agile new competitor" with a price impact format so they can claim they're working to drive down prices. They will not include any facilities with this either, but if it becomes a spin they may be forced to source and sign up long term deals with other suppliers before the deal is done (Unified or whoever, honestly I'm not familiar with all of them). With appropriate long term contracts they should have a positive balance sheet as promised. Kroger may be forced to financially backstop this chain against failure for ten years unless it is acquired or "negligently managed" . In reality they're just creating a new competitor to the growing threat of Winco and giving it to ACI shareholders in exchange for their vote on the final merger deal.

At the end of the day, I think Kroger is going to end up with Northern California, Chicago, the Mid Atlantic stores, the Northeastern stores, United (except for New Mexico), and some PNW / Intermountain / So Cal stores that don't overlap with Smith's, Fred Meyer or Ralph's.

Kroger isn't going to take the Austin Randalls stores and any Houston stores that overlap with an existing Kroger store will likely be divested.

Tom Thumb / Albertsons in DFW will likely be sold to HEB, Berkshire's or Berkshire Bros. There's a slight chance it also goes the SpinCo route and is eventually carved up over the next decade or so. Maybe Kroger keeps the Louisiana stores.

The SW division (AZ / NV / El Paso) is sold in its entirety to Save Mart. I also can see the New Mexico United operated Albertsons stores also going to Save Mart.

SpinCo takes the PNW, So Cal, Chicago, Mid Atlantic and Denver division divests. SpinCo will eventually close / sell stores piecemeal similar to how Albertsons LLC did. I'd expect this may be the way that Stater Bros gets some additional SoCal stores. I'd expect Denver will eventually be wound down similar to how Albertsons wound down its Denver division.

I am still very opposed to this merger. I believe that this will make Kroger a weaker competitor (if it goes through). The extra costs involved in this merger will mean that Kroger's pricing will increase and we'll see Kroger increase prices and close stores in order to remain solvent.

Consumers would be better off with Kroger remaining in its current state and Albertsons parting off its stores to multiple competitors versus Kroger absorbing everything that couldn't immediately get parted out.

Albertsons just holding a full on fire sale would still potentially be at risk of FTC actions, possibly creating more obstacles to transactions. Because of the financial shenanigans (has to be Apollo's work) they will need to move fast to carve up the company, and the FTC involvement in such dealings would slow the process down to a crawl. The FTC could also demand to see the books and learn that ACI is insolvent without the profits of NorCal, Chicago etc. then block any asset sale to Kroger at all with the intent of protecting competition elsewhere (even though there is minimal Kroger overlap on those deals). Basically are they better off having one big transaction deal with the FTC, vs having multiple transactions that all individually have to go through the FTC potentially taking a longer time?

And this whole SpinCo thing is not a sustainable company as a general supermarket chain with underperforming stores splattered across the map. The highest cost and lowest return way to facilitate any transaction is the SpinCo route. That is why I don't understand why the thought process on the board is that they're going to make this big, huge SpinCo organization. The bigger it is, the more spread out it is, and the more undesirable stores or underperforming divisions it holds-the faster it goes completely belly up. If there is not an actual merger with Kroger there is absolutely zero reason for a "SpinCo" being created.

[arizonaguy]

They're going to follow the 7-Eleven Speedway model to the T, except for closing Pre approval.

Basically they are going to start by putting selected locations on the block and selling them to competitors either a store at a time (in surgical markets like SoCal where overlap is a mess) or in an entire group (like the more problematic Nevada and Arizona where a KR store is seemingly always on the other corner from an ACI store). This will be the wave 1 of divests and it is likely imminent that the "for sale" list gets posted of selected ACI and KR stores. The list was made cooperatively as previously disclosed - it isn't collusion if you announce it and the government doesn't immediately say no.

The divestitures are just straightforward sales to competitors. The SpinCo idea was BS from the start and they never intended to actually go through with it unless they were forced to - which of course by design the SpinCo would quickly degenerate into a group of zombie stores since they are not willing to part with any non-retail assets (warehouses, manufacturing plants, etc.). I'm betting that the rampant speculation on banners like Albertsons itself here is misguided too. They won't let any banner go unless they have a convenient need to sell it entirely (QFC although they'll surgically pick and choose what sells vs converts to Safeway, discount banners Rvler FoodsCo and Food4Less). Aside from QFC which could go anywhere I suspect that the SpinCo proposal would primarily be the discount brands and have a stated intent to convert other stores lumped in to one of those formats. They get to claim they've created an "agile new competitor focused on driving down food prices in the community" and who could say no to that?

As far as divesting without FTC approval? That's exactly what they've indicated they would do from day one, at least to start the process. And everyone is probably better off with the companies doing this vs. the FTC or state AGs because they love to point out problems like the Haggen debacle... But they are just as responsible for that failure as ACI.

So it's going to go down like this.

Divest Wave 1: sale to competitors self selected obvious overlaps (even fixing some overlaps that survived the ACI merger like Vons across the street from Albertsons). Groups like ACI southwest coupled with surgically selected in SoCal and PNW. They'll mainly be less desirable stores coupled with bad landlord relationship stores threatened with redevelopment. These are stores that if there was no opposition at all to the merger they'd just close them right away unless the rent was cheap. Intent is to get rid of what they would anyway at a profit and move to localized discussions with AGs etc. on any other situation they find undesirable.

Divest Wave 2: these will be additional stores added to the sale to competitor list which are selected through negotiations with a state AG or other governmental agency. These probably will be "better" stores which they would rather keep but they are willing to let them go in an effort to make the deal happen.

Divest Wave 3 (Possible SpinCo): this will be any store they couldn't find a buyer for in Wave 1 and Wave 2. They will throw the discount brands in here as a token as well. I would expect to see anything in this bucket rebranded to the discount banner and format at KR/ACI expense. This group will be sold either entirely as one transaction to one buyer, or it will become SpinCo the "agile new competitor" with a price impact format so they can claim they're working to drive down prices. They will not include any facilities with this either, but if it becomes a spin they may be forced to source and sign up long term deals with other suppliers before the deal is done (Unified or whoever, honestly I'm not familiar with all of them). With appropriate long term contracts they should have a positive balance sheet as promised. Kroger may be forced to financially backstop this chain against failure for ten years unless it is acquired or "negligently managed" . In reality they're just creating a new competitor to the growing threat of Winco and giving it to ACI shareholders in exchange for their vote on the final merger deal.

At the end of the day, I think Kroger is going to end up with Northern California, Chicago, the Mid Atlantic stores, the Northeastern stores, United (except for New Mexico), and some PNW / Intermountain / So Cal stores that don't overlap with Smith's, Fred Meyer or Ralph's.

Kroger isn't going to take the Austin Randalls stores and any Houston stores that overlap with an existing Kroger store will likely be divested.

Tom Thumb / Albertsons in DFW will likely be sold to HEB, Berkshire's or Berkshire Bros. There's a slight chance it also goes the SpinCo route and is eventually carved up over the next decade or so. Maybe Kroger keeps the Louisiana stores.

The SW division (AZ / NV / El Paso) is sold in its entirety to Save Mart. I also can see the New Mexico United operated Albertsons stores also going to Save Mart.

SpinCo takes the PNW, So Cal, Chicago, Mid Atlantic and Denver division divests. SpinCo will eventually close / sell stores piecemeal similar to how Albertsons LLC did. I'd expect this may be the way that Stater Bros gets some additional SoCal stores. I'd expect Denver will eventually be wound down similar to how Albertsons wound down its Denver division.

I am still very opposed to this merger. I believe that this will make Kroger a weaker competitor (if it goes through). The extra costs involved in this merger will mean that Kroger's pricing will increase and we'll see Kroger increase prices and close stores in order to remain solvent.

Consumers would be better off with Kroger remaining in its current state and Albertsons parting off its stores to multiple competitors versus Kroger absorbing everything that couldn't immediately get parted out.

Albertsons just holding a full on fire sale would still potentially be at risk of FTC actions, possibly creating more obstacles to transactions. Because of the financial shenanigans (has to be Apollo's work) they will need to move fast to carve up the company, and the FTC involvement in such dealings would slow the process down to a crawl. The FTC could also demand to see the books and learn that ACI is insolvent without the profits of NorCal, Chicago etc. then block any asset sale to Kroger at all with the intent of protecting competition elsewhere (even though there is minimal Kroger overlap on those deals). Basically are they better off having one big transaction deal with the FTC, vs having multiple transactions that all individually have to go through the FTC potentially taking a longer time?

And this whole SpinCo thing is not a sustainable company as a general supermarket chain with underperforming stores splattered across the map. The highest cost and lowest return way to facilitate any transaction is the SpinCo route. That is why I don't understand why the thought process on the board is that they're going to make this big, huge SpinCo organization. The bigger it is, the more spread out it is, and the more undesirable stores or underperforming divisions it holds-the faster it goes completely belly up. If there is not an actual merger with Kroger there is absolutely zero reason for a "SpinCo" being created.

SpinCo is the 2023 version of what Albertsons LLC was in 2006. It's a holding pace for assets that essentially will be sold off or closed. They're not going to bill it that way but that's what it will be. Albertsons LLC shed 2/3 of its stores before it ended up reuniting with the stores that were sold to SuperValu. I don't expect them to put much of anything valuable into SpinCo.

The point of SpinCo is to remove the stores that would cause obstacles to the merger from being obstacles to the merger. If they weren't junk assets, they could be sold to someone else. SpinCo is going to take the junk that nobody wants but would still provide regulatory issues if it wasn't separated out from the newly merged entity.

SpinCo could very well end up with QFC, the Albertsons/Safeway Denver division, the Albertsons/Safeway Dallas division, Randall's, as well as junk stores in Chicago, SoCal, and the Mid Atlantic. I wouldn't be surprised at all to see Mariano's end up as part of SpinCo.