The two largest supermarket chains in the US had planned to merge. Now they are caught in a bitter legal dispute

Kroger and Albertsons’ plan to merge and form the largest supermarket company in the US has fallen apart in acrimonious fashion, after Albertsons pulled out of the proposed US$24.6bn deal.

Both companies have since accused each other of failing to support the merger fully. Albertsons has filed a legal claim against Kroger for a US$600mn termination fee plus billions for what it claims are legal costs and lost shareholder value, claims which Kroger dismissed as “baseless”.

“After reviewing options, the company determined it is no longer in its best interests to pursue the merger,” Kroger said in a statement.

The split comes just a day after two judges blocked the merger and agreed with the Federal Trade Commission (FTC) that the deal would remove competition between the country’s two largest grocery chains.

The FTC has argued that the move would lead to higher consumer prices and reduced bargaining power for workers.