A state court in Washington has temporarily blocked Albertsons Companies Inc from paying a $4 billion dividend to shareholders before the grocery chain closes its proposed deal with rival Kroger (NYSE:KR) Co, documents filed said on Thursday.
Kroger Co snapped up Albertsons in a $25 billion deal in last month's mega merger between the No.
1 and 2 standalone grocers to better compete against U.S. grocery industry leader Walmart (NYSE:WMT) Inc on prices, but it was expected to run into antitrust roadblocks.
"By eliminating its cash-on-hand and nearly doubling its debt, Albertsons will be in a weakened competitive position relative to Kroger, thereby harming grocery consumers and workers throughout Washington," State Court Commissioner Henry Judson wrote in issuing the temporary restraining order.
Washington State Attorney General Bob Ferguson called the temporary order a "huge victory".
A hearing on the case is scheduled for Nov. 10.
Source: Investing.com
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