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Kroger Co.’s former CEO testified in court that the grocery giant did what it was required to do to secure regulatory approval for a $24.6 billion merger with Albertsons Co., which is now demanding damages after the deal was blocked for antitrust reasons.
Rodney McMullen told Delaware Chancery Court Judge Lori Will on Tuesday that the transaction “was just doomed from the beginning, unfortunately,” because of stiff resistance from the US Federal Trade Commission under then-chair Lina Khan to mergers generally. Albertsons called off the deal after a federal court blocked it and sided with the FTC in December 2024.
Will is hearing testimony at a trial to determine whether Kroger is responsible for the merger’s failure, with around 30 witnesses slated to testify over two weeks.
Albertsons accused Kroger in a lawsuit of breaching the merger agreement by failing to propose an adequate package of assets to sell to secure regulatory approval for combining more than 4,000 stores, focusing instead on achieving internal profit targets. Kroger says it spent more than $1 billion to pursue the merger and its litigation fight with antitrust regulators.
The deal envisioned Kroger, the largest U.S. grocery chain, buying No. 2 Albertsons to better compete against Amazon.com Inc., Walmart Inc. and others. To obtain regulatory approval, Kroger and Albertsons agreed to sell hundreds of stores to C&S Wholesale Grocers Inc. The merger agreement called for no more than 650 stores to be sold.
Kroger has more than 100 stores in Indiana in 50-plus cities.
Albertsons wants Kroger to pay more than $9.3 billion. That includes a $600 million termination fee plus interest and costs, and more than $8 billion for what Albertsons says was a lost premium stockholders would have reaped from the deal and taxes on those gains. To get damages, Albertsons must prove Kroger knowingly breached the merger agreement. Albertsons is also seeking to show that the alleged breaches made it less likely the deal would close.
McMullen’s testimony came a day after former Albertsons chief executive officer Vivek Sankaran told the judge that Kroger failed to do everything possible to get the merger approved. Sankaran described how McMullen became less responsive as the deal faced increasing regulatory challenges.
McMullen, who resigned in March 2025 following a board investigation into his personal conduct, said the circumstances around his departure weren’t linked to the merger or his job performance. The judge previously blocked Albertsons from accessing internal records regarding McMullen’s conduct.
During testimony on Tuesday, McMullen said he personally negotiated the termination fee and the 650-store limit for the merger agreement with Stephen Feinberg, the former CEO of private equity firm Cerberus Capital Management, Albertsons’ largest shareholder. He also defended his responsiveness to Albertsons, saying that he relied on others at Kroger who had more expertise in certain areas to answer questions.
A lawyer for Albertsons questioned McMullen about how much influence he exercised over the divestiture package, pointing to examples of where he weighed in on the financial aspects of certain stores. Albertsons has alleged that Kroger prioritized hitting financial targets over satisfying regulators.
McMullen said he had a “limited role” in the store selection process and only asked questions about five stores. He said he never insisted that changes be made to the divestiture packages. He also said Kroger relied on the advice of antitrust counsel to come up with the stores and assets that were to be sold, adding that the company would have sold 650 stores if the FTC had asked.
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