In a significant legal turn in the U.S. grocery retail sector, Kroger has reached a confidential settlement with C&S Wholesale Grocers, closing the chapter on a high-profile lawsuit tied to the collapse of Kroger’s planned merger with Albertsons. The resolution ends months of legal wrangling over a $125 million termination fee that C&S claimed it was owed.
The dispute originated earlier this year when C&S Wholesale Grocers filed suit in Delaware Superior Court, asserting that Kroger’s inability to finalise its $24.6 billion merger with Albertsons deprived C&S of a massive divestiture package. Under the proposed plan — designed to appease regulators — C&S was set to acquire nearly 600 supermarkets, access to sought-after private-label brands, and various operational assets.
When the Federal Trade Commission and several state attorneys general opposed the merger on antitrust grounds, the deal collapsed. C&S argued that this triggered Kroger’s obligation to pay the agreed termination fee. Kroger countered, alleging C&S had breached its own contractual obligations by engaging in “unauthorised discussions” with Albertsons employees regarding the arrangement.
A Confidential Agreement
On Friday, both companies jointly filed notice with the Delaware court that all claims had been resolved and the case dismissed “with prejudice” — meaning the same claims cannot be brought again in that jurisdiction. True to the discreet nature of high-stakes corporate settlements, the parties declined to disclose whether any payment was made or to provide details about the terms.
Kroger’s Chairman and interim CEO, Ron Sargent, emphasised a desire to move forward. “We are pleased to resolve the claims from C&S, and we look forward to a friendly relationship with them going forward. Kroger remains focused on serving our customers and running great stores across the U.S.,” he said.
C&S echoed the sentiment in its own statement, noting, “We are pleased to have reached this resolution with Kroger. We are looking forward to our continued transformation journey. C&S is well positioned for the future and committed to our continued growth across the U.S.”
A Broader Industry Context
For industry observers, this settlement marks another pivotal moment in a merger saga that dominated supermarket headlines throughout 2023 and 2024. International Supermarket News has reported extensively on the FTC’s decision to block the Kroger–Albertsons union, a move that was lauded by some as a victory for consumer protection but criticised by others as politically driven and detrimental to competition in the rapidly evolving grocery space.
The proposed merger would have created one of the largest supermarket groups in the United States, potentially rivaling Walmart’s grocery dominance. The divestiture deal with C&S was considered a critical piece of the regulatory puzzle, allowing Kroger and Albertsons to offload overlapping stores and maintain competitive pricing in affected markets.
C&S Eyes Expansion Despite Setback
Despite the collapse of the Kroger deal, C&S has continued to strengthen its retail footprint. The company, best known as one of America’s largest grocery wholesalers, was part of an investor group that agreed in February to acquire Southeastern Grocers from Aldi. More recently, in June, C&S announced it would acquire SpartanNash, further signalling its ambition to play a larger role in both wholesale and retail markets.
For Kroger, the legal closure means it can focus on its core business operations, efficiency improvements, and expanding its omnichannel grocery services. While the supermarket giant must continue navigating intense competition from Walmart, Costco, and Amazon Fresh, removing the lawsuit from its ledger allows leadership to channel more resources toward strategic growth.
What It Means for the U.S. Grocery Market
The settlement underscores the complex, high-stakes nature of modern grocery mergers, where every contractual clause, divestiture agreement, and regulatory condition can have far-reaching consequences. It also serves as a reminder that the industry is in a period of intense transformation — with consolidation, e-commerce integration, and supply chain modernisation all reshaping how retailers compete.
In this case, Kroger’s decision to settle — whether or not accompanied by financial payment — reflects a pragmatic approach to limit legal exposure and reputational risk. For C&S, resolving the matter clears the way for its aggressive expansion plans without the distraction of drawn-out litigation.
As International Supermarket News has noted in previous coverage, the fallout from the blocked Kroger–Albertsons merger will continue to influence the competitive landscape for years to come. This settlement is simply one more chapter in a story that has altered the dynamics of the U.S. supermarket industry — and may yet inform how future mega-mergers are approached, structured, and scrutinised.