Saturday, June 03, 2000
Kroger's attempt at Winn-Dixie buyout halted
By Lisa Biank Fasig
The Cincinnati Enquirer
Kroger Co.'s attempt to acquire 69 Winn-Dixie stores in Texas and five in Oklahoma has been shelved by the Federal Trade Commission, which unanimously voted Friday to challenge the acquisition.
The regulatory agency voted 5-0 to seek a preliminary injunction to block the buyout because it would give Kroger 33 percent of the Fort Worth, Texas, grocery market.
James Fishkin, an attorney for the FTC, said 31 of the stores operate in the Fort Worth region, where Kroger already operates 22 of its 169 Lone Star stores.
Mr. Fishkin said the FTC would reconsider the acquisition if Kroger were willing to drop the Fort Worth stores from the deal. “The largest portion of the deal is in metro Fort Worth,” he said.
The unspecified cash deal also called for Kroger to buy a dairy in Fort Worth from Winn-Dixie.
In a statement, Kroger senior vice president Paul Heldman said the company is disappointed but not giving up.
“We continue to believe that this transaction would benefit customers in Texas and southern Oklahoma who would be offered the benefits of Kroger's superior selection, service and value in this aggressively competitive market,” he said. “We intend to explore our legal alternatives.”
Kroger in November agreed to buy the stores from Winn-Dixie, which since announced plans to close 10 percent of its 1,189 stores. Kroger said at the time that Texas is a very competitive market in which to strengthen its position.
Sources at Winn-Dixie could not be reached.
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