Kroger-Albertsons Divestiture Bid Aims to Head Off Challenge (1)

Kroger Co.‘s preemptive divestiture proposal in its $24.6 billion acquisition of rival Albertsons Cos. will likely blunt any attempt by federal regulators to block the deal.

The divestiture plan—which envisions spinning off as many as 375 stores under a new Albertsons subsidiary called SpinCo—puts a potential solution to competition concerns on the table before regulators have a chance to propose a remedy.

“We believe we have a clear path to achieve regulatory approval with divestitures,” Kroger Chief Financial Officer Gary Millerchip said.

Companies have rarely proposed a divestiture at such an early stage, but are increasingly considering it earlier ...