A story about Kroger’s and Albertsons’ CEOs giving details on the controversial $25 billion merger was published on Sunday in The Denver Post. As rural outposts, neither Durango nor Cortez has paid much attention to the proposed merger, announced last October. Yet, both companies are doing business in the Southwest. The two CEOs, Kroger’s Rodney McMullen and Albertsons’ Vivek Sankaran, attempted a charm offensive to assure shoppers the merger is all about improving life for consumers.
But, as usual for mega-mergers over the past 35 years or so, when then-Fed chairman Alan Greenspan removed the barriers for mergers and acquisitions to run amok, the CEOs tell us it’s all for the benefit of consumers. We’ll love more productivity, more value for the goods, lower prices, more quality-control and yadda-yadda. All of which never happens.
But here’s the thing that rarely gets published until after the merger: the bonuses paid to those CEOs for making it happen. Then, mysteriously, they nearly always retire shortly after the deal goes down with bonuses more than $100 million to assure some modest level of comfort in their golden years in the Hamptons.
This merger has yet to be approved by the Federal Trade Commission and the U.S. Securities and Exchange Commission. Whatever happens, follow the money.
David Ohman
Durango
