Prospective Impact of the Stores Divestiture Plan on Merger Reviews by U.S. Antitrust Regulators

Larry Bumgardner, Graziadio School of Business and Management, Pepperdine University, USA

ABSTRACT

Mergers of competing retail companies often have more obvious and direct effects on consumers than mergers in many other industries. That is especially true when the combination is of two chains, where many customers shop regularly. Thus the $9 billion combination of the Albertsons and Safeway companies in 2015 was likely to evoke far more consumer interest than even a much larger merger of major industrial conglomerates, such as the proposed $130 billion merger of Dow Chemical and DuPont.1 As a result, the Federal Trade Commission’s original approval of the Albertsons-Safeway merger, followed quickly by the collapse of the divestiture plan that allowed the merger to go forward, could prove to be a pivotal case study in the specialized world of merger review. This article will analyze how the Albertsons merger was first approved, what went wrong with that plan, and whether the lessons learned from the Albertsons case may affect how antitrust regulators in the United States approach future horizontal mergers of retailers, or even in other industries.

INTRODUCTION

Although the Sherman Antitrust Act of 1890 remains the most important antitrust statute in the United States, the primary law governing the review of proposed mergers comes from the Clayton Antitrust Act of 1914. 2 When federal courts in the early 1900s interpreted the Sherman Act’s prohibitions more narrowly than Congress had intended, the Clayton Act was passed to supplement the coverage of the Sherman Act.3 Thus a basic premise of the Clayton Act is that if judicial interpretation of the Sherman Act made it difficult to break up monopolies under that statute, the Clayton Act would go further and seek to prevent potential monopolies before they could ever be formed. Therefore the Clayton Act was aimed at a variety of business practices that could be used to create a monopoly. Because mergers of competing or large companies could be a prime means of achieving a monopoly, the Clayton Act includes a powerful provision that can be used to stop potential mergers and acquisitions in advance. Specifically, Section 7 of the Clayton Act states: “No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital … of another person … where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.4 It should be noted that this statutory language allows for blocking a proposed merger that could fall far short of actually creating a monopoly. Rather, the legal standard established by Section 7 of the Clayton Act is whether the effect of the combination may merely “tend to create a monopoly,” or “may be substantially to lessen competition.”5 As a result, only the probability of anticompetitive effects may be enough to block a merger.

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THE ROLE OF GOVERNMENT REGULATORS

The ambiguity of this merger test from Section 7 leaves a great deal of leeway for government regulators in deciding which mergers to approve or block. Those administrative decisions are usually guided – but not officially controlled – by the regulators’ own voluntary guidelines and benchmarks, and to some extent by precedent. Further, the decisions of U.S. antitrust regulators officially require enforcement by courts (either federal or administrative courts). However, from a practical business standpoint, a lengthy court review is usually far too time-consuming for the potential merger partners to endure. If government approval cannot be obtained in a reasonable time, the companies will instead forgo their merger plans. Thus the initial administrative decision by government regulators is often more important practically than court review or interpretation of the underlying statutory law. A further complication is that there are two different government agencies who share responsibility for reviewing proposed mergers, and they do not always agree. When a proposed merger is of sufficient size, it must be reported to the government in advance under the Hart-Scott-Rodino Act.6 Then either the U.S. Justice Department or the Federal Trade Commission (FTC) will be assigned the case to make the decision on whether to approve, or seek to block, the acquisition. In some industries, approval by an additional federal agency will also be required, such as the Federal Communications Commission in the telecommunications field. Businesses might hope that the Justice Department and the FTC would split their overlapping merger authority on predictable and amicable grounds, but that is not always the case. Each agency does have particular industries for which it usually reviews mergers. But that division of labor is not required by statute. Further, because inter-industry or conglomerate mergers often involve several different industries, those combinations further scramble the predictability of which agency will be assigned a particular case. In fact, sometimes a full-fledged political battle will break out over which agency will review a crucial or high-profile merger. As then-FTC Commissioner William Kovacic told the Wall Street Journal in 2011 about conflicts between the FTC and the Justice Department: “There have been negotiations, trades, bargains, coin tosses, possession arrows, arbitration, mediation. Tried them all.”7 If the agencies cannot resolve their differences, the White House has to step in to decide which agency will be given jurisdiction over that merger. This is more than just a bureaucratic turf battle for potential merger partners to navigate. Rather, because the two agencies do not always demonstrate the same vigor for antitrust law enforcement, which agency has approval authority has the potential to be the deciding factor on whether or not a merger is approved. Moreover, changes in the presidency and the resulting administration view on antitrust law could also affect the outcome. Any President has the potential for more direct authority and control over the antitrust decisions of the Justice Department than of the FTC. The Attorney General and Assistant Attorney General for the Antitrust Division, as leaders of the Justice Department, serve at the pleasure of the President. By contrast, the Federal Trade Commission is governed by five commissioners serving staggered seven-year terms. Although the commissioners are appointed by the President (subject to Senate confirmation), no more than three of the five can come from the same political party. That makes the FTC potentially more independent of the White House view on antitrust law enforcement. That is important because different presidential administrations may follow varying philosophical approaches to antitrust law. Most recently, the administration of President Barack Obama has sought to strengthen antitrust law enforcement. As a presidential candidate in 2007, Obama said the George W.

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Bush Administration of the early 2000s had “what may be the weakest record of antitrust enforcement of any administration in the last half century.”8 Continuing his statement to the American Antitrust Institute, Obama said: “As president, I will direct my administration to reinvigorate antitrust enforcement. It will step up review of merger activity and take effective action to stop or restructure those mergers that are likely to harm consumer welfare, while quickly clearing those that do not.”9 There is significant debate in the antitrust community about how well the Obama Administration has fulfilled its goal of reinvigorating antitrust enforcement, but that question will be left for another day. For purposes of this article on merger review, there is little doubt that, at least in the past few years, the Obama Administration has been significantly more aggressive in either blocking mergers entirely, or in demanding concessions or divestitures of assets before granting approval, as in the case of the Albertsons- Safeway combination.

ALBERTSONS-SAFEWAY MERGER

Prior to announcing their plans to merge, Safeway was the second largest supermarket chain in the United States by market share, and Albertsons was the fifth largest. Safeway operated stores under the Safeway, , Pavilion’s, and several other brand names, and Albertsons included eight different store brands in various parts of the nation. Combining the two chains would have created a company with more than 2,400 stores operating under 16 different brand names. In March 2014, a private equity group led by Cerberus Capital Management LP, which already controlled Albertsons, agreed to purchase the publicly traded Safeway Inc. for approximately $9 billion.10 The official press release announcing the merger noted the benefits to customers from the merger. “Working together will enable us to create cost savings that translate into price reductions for our consumers,” Albertsons chief executive officer Bob Miller said.11 Further, the announcement stated that “no store closures are expected as a result of this transaction.”12 Albertsons was not the only supermarket that had been interested in buying Safeway. , the number one supermarket chain with 2,630 stores, had tentatively offered a slightly higher price for Safeway, but antitrust concerns about that potential deal prompted Safeway to accept the Albertsons offer instead.13 That was a prudent decision by Safeway, as a merger combining the two largest chains would have faced significant antitrust difficulty, and would have almost certainly required massive divestitures to have any chance of obtaining government approval. On the other hand, allowing the No. 2 and No. 5 players to merge would be less dangerous from an antitrust standpoint, as combining those two companies would have the potential for creating a stronger competitor to No. 1 Kroger. The most difficult aspect of analyzing many horizontal mergers, and especially this supermarket merger, is determining the precise product market involved. Should the product market (or “line of commerce,” to use the Clayton Act terminology) consist only of traditional supermarket chains? Or should include the many other places where consumers can buy groceries, including convenience stores and large discount retailers such as Wal-Mart and Target? In fact, according to statistics compiled by Euromonitor International, Wal-Mart accounted for 29.8 percent of all grocery sales in the U.S. in 2013, the year before the Albertsons merger was announced.14 The leading supermarket chain, Kroger, had only 9.6 percent of all grocery sales, and a combined Albertsons-Safeway would have had only 5.4 percent in 2013.15 Even after combining their stores, Albertsons-Safeway would still trail Kroger in both market share and number of stores. Further, it would

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continue to have a relatively small share of the overall market, if the FTC used a broad definition of the product market that would include all types of grocery sellers. The relevant market for purposes of antitrust law also includes the geographic market. Here, the key factor often is not the nationwide U.S. market, but narrow sub-markets in specific cities or counties where the two merging companies happen to overlap. Too much overlap in specific geographic markets frequently can be remedied through limited and targeted divestitures of stores or other assets, without undermining the overall benefits of the merger. Typically, the merging companies will negotiate the necessary divestitures with the government antitrust regulators. That is how the merger approval process for Albertsons and Safeway played out. After nearly a year of review, the FTC on a 5-0 vote approved a settlement with the two companies to allow the merger to proceed by requiring the sale of 168 overlapping stores. On January 27, 2015, in a court complaint filed by the FTC as part of the settlement, the product market was defined as “the retail sale of food and other grocery products in .”16 The agency also defined supermarket to mean “any full-line retail grocery store that enables customers to purchase substantially all of their weekly food and grocery shopping requirements in a single shopping visit.”17 Based on this one-stop shopping requirement, the FTC excluded other retail stores, such as “convenience stores, specialty food stores, limited-assortment stores, hard-discounters, and club stores,” from the product market. 18 On the other hand, it was willing to include “supermarkets within ‘hypermarkets,” such as Wal-Mart Supercenters,” because they have sufficient products to meet the one- stop shopping standard.19 This alone was an important decision, as it limited the number of potential competitors for the combined Albertsons-Safeway, especially in terms of particular geographic markets. In the future, this finding of a relatively narrow product market for supermarkets could make it more difficult for additional consolidation among the remaining major supermarket chains in the United States. Moreover, it could provide some guidance on how to define the product markets in other retail mergers. Proceeding then to the geographic market question, the FTC noted that consumers tend to shop at grocery stores very close to where they live. As a result, the FTC studied areas that ranged from a two- mile to a ten-mile radius around any store owned by either Albertsons or Safeway. (The size of the radius was based on population density and similar factors.) That meant that many cities actually included more than one geographic market for purposes of reviewing this merger. Applying the government’s own Horizontal Merger Guidelines, the agency calculated the market concentration levels for each of those geographic markets by using the Herfindahl-Hirschman Index (HHI). Based on the HHI numbers, the FTC concluded that the acquisition as proposed would create too much concentration and be “presumptively unlawful” in 130 specific geographic markets.20 The vast majority of those markets were in California, state, Oregon, and Arizona, where both Safeway and Albertsons already had a strong presence. In addition, the FTC was concerned about the number of competing stores that would remain in those 130 markets after the merger. Specifically, without any divestitures, the number of competitors would decrease from 2 to 1 in 13 markets, from 3 to 2 competitors in 42 markets, 4 to 3 in 43, 5 to 4 in 27, and 6 to 5 in five markets. Although not a hard and fast rule, the FTC will almost always reject a 2-to-1 merger, as that would yield a monopoly in a particular market. Any 3-to-2 merger, producing a duopoly, is also highly unlikely to be approved, and most 4-to-3 mergers face a skeptical review. On the other hand, 5-to-4 and 6-to-5 mergers are usually easier to approve, depending on the specific facts and conditions.

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In response, Albertsons entered a consent decree in which it agreed to sell 168 stores in those 130 markets to four different companies. The vast majority – 146 stores – were sold to a small regional supermarket, Haggen Inc., for a reported price of more than $300 million. Before the purchase, the Haggen’s chain had only 18 stores, all located in the Pacific Northwest. After the divestitures, in a matter of only a few months, Haggen soared from 18 stores in two states to 164 stores in five states, including the highly competitive grocery markets of California, Arizona, and Nevada. The number of its employees jumped from roughly 2,000 to 10,000. Nevertheless, referring to all four acquiring companies, the FTC stated in January 2015 that the “proposed buyers appear to be highly suitable purchasers and are well positioned to enter the relevant geographic markets.”21

LITANY OF TROUBLES FOR HAGGEN

That proved to be wishful thinking in the case of Haggen. Under the agreement, the regional supermarket had only 150 days to convert all 146 stores to the Haggen brand – a formidable expansion project for a small company. The store conversions began in February 2015 and continued throughout the spring months, ranging from one to 12 conversions each week.22 Haggen initially offered to retain all current employees of the converted stores, which was good strategy for continuity, customer relations, and labor peace. But the problems started soon thereafter. In the Pacific Northwest, Haggen was known for strong customer service and its usage of local products – not necessarily for its low prices. As it expanded quickly to other markets, it did not have sufficient time to find local products or to differentiate itself to customers. Instead, it was often left with merchandise from the prior store, which in some cases it then sold at higher prices than under the prior ownership. At the same time, another Albertsons or formerly Safeway-owned store usually remained within a few miles of the new Haggen store. (Absent such a nearby store, there would have been no need for a divestiture in that geographic area.) With some customers believing that the Haggen stores were overpriced, business declined quickly. Because of the slow sales, by July 2015 Haggen began to cut costs by laying off some employees and reducing hours for others.23 By August, Haggen announced that it would close 27 stores in a “right- sizing” effort.24 Most were stores that it had acquired only a few months earlier. A Southern California branch of the United Food and Commercial Workers, the union representing many employees at the stores, filed a grievance against Haggen, Albertsons, and Vons (formerly the main Safeway brand in Southern California). Citing layoffs of disabled and senior workers, and the reduction of hours for others, the union’s grievance alleged that Haggen “violated the collective bargaining agreement and deprived bargaining unit members of their rights under the contract in the way it handled and implemented the sale of Albertsons and Vons stores to Haggen.”25 Meanwhile, Albertsons sued Haggen for $41 million, claiming that Haggen had not paid all that it owed for the inventory it had assumed in the converted stores.26 Haggen responded in early September by suing Albertsons for $1 billion, alleging unfair competition and contending that Albertsons used a variety of means to undermine the new Haggen stores. 27 Specifically, the complaint alleged that Albertsons engaged in “coordinated and systematic efforts to eliminate competition and Haggen as a viable competitor in over 130 local grocery markets in five states,” and “made false representations to both Haggen and the FTC about Albertsons’ commitment to a seamless transformation of the stores into viable competitors under the Haggen banner.”28 Albertsons denied the allegations, but in January 2016 agreed to pay Haggen $5.75 million to settle the suit.29

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BANKRUPTCY COURT PROCEEDINGS

Facing this wide array of problems, Haggen filed for Chapter 11 bankruptcy protection on September 8, 2015. The filing came a little more than seven months after the FTC approved the divestiture deal in late January. A retail consultant told the Wall Street Journal: “I’ve never seen a supermarket or retailer file bankruptcy as quickly after the deal closed as Haggen.”30 The bankruptcy filing prompted Haggen to announce that it would close and sell 127 stores, including all of its newly acquired stores in California, Arizona, and Nevada. By December, Haggen had decided to sell off all its stores, including its “core stores” in the Pacific Northwest. The bankruptcy court then oversaw the sale of the Haggen stores, seeking to maximize the value of the bankruptcy estate for the benefit of Haggen’s creditors. When the first 95 stores were auctioned in November 2015, Albertsons turned out to be the winning bidder on 33 of the 36 stores for which it had bid. In fact, Albertsons acquired the most stores in the initial bankruptcy auction, with the Smart & Final chain a close second at 32 stores. The terms of the sale may be as surprising as the winning bidder. According to the Wall Street Journal, Albertsons paid about $14 million to reacquire those 33 stores – not even 5 percent of the more than $300 million it had received for all 146 divested stores in January.31 Further, the Journal reported, Albertsons’ winning bid “for more than a half dozen of the stores was $1 each,” plus the assumption of liabilities.32 Defending the unusual return of the stores to Albertsons, an FTC spokeswoman noted that some of those stores had no bidders other than Albertsons. In such cases, “it is better for consumers that Albertsons operate a store, so we have not objected to Albertsons buying back stores that other supermarket operators were not interested in,” the FTC’s Betsy Lordan told the Journal.33 The FTC statement appears to be a reference to the “failing firm” defense to an antitrust suit. The defense is premised on the theory that a merger that might result even in a monopoly is still preferable to letting a failing company go out of business entirely, which would in itself eliminate a competitor and likely cause all of its employees to lose their jobs. While the theory is logically sound, the defense has been used successfully only occasionally since it was established by a 1930 Supreme Court decision.34 Albertsons gained even more Haggen locations in March 2016. Concluding the bankruptcy court’s sale of the stores, Albertsons agreed to pay a base amount of $106 million to acquire 29 additional Haggen properties.35 That included 14 of the original Haggen “core stores,” which will continue to be operated under the Haggen brand name. Between the November 2015 auction and the March 2016 purchase, Albertsons acquired a total of 62 Haggen stores, including 48 that were part of the original divestiture order. Thus the company that was forced to sell Haggen 146 stores in January 2015, due to antitrust concerns, was able to buy back nearly a third of those same stores in the following 14 months. Rather than fully addressing the FTC’s antitrust concerns, the divestitures to Haggen appear to have yielded the unintended result of a stronger and bigger Albertsons chain, and reduced competition in at least those geographic markets where Albertsons was able to buy back the stores it had recently agreed to divest.

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WHAT HAPPENED?

So what went wrong? Was Haggen simply incapable of accomplishing such a massive and challenging expansion in such a short time frame? Or was it the victim of an intentional effort by Albertsons to undermine its new competitor, as Haggen contended? Or even if Albertsons did not attempt to undermine Haggen, was it simply willing to go along with a divestiture plan with questionable prospects, so long as it accomplished the company’s main goal of gaining FTC approval for its merger with Safeway? One may never know the full answers to these questions, especially since Haggen’s suit against Albertsons has now been settled. On the other hand, should much of the fault lie instead with the FTC? Did the agency make overly optimistic assumptions about the viability of the divestiture plan, or fail to anticipate the magnitude of problems that could result from such a rapid expansion by Haggen? Was it reasonable for the FTC to determine that Haggen and the other buyers of the divested stores were, in the commission’s own words, “highly suitable purchasers and are well positioned to enter the relevant geographic markets”?36 One could argue that, like overly ripe fruit in a supermarket’s produce section, the plan to sell so many stores to Haggen should not have passed the “smell test.” There were industry doubts about Haggen’s prospects from the outset, especially since Haggen relied on its new rival, Albertsons, for pricing information on the inventory it assumed. “Nobody thought they could pull this off,” David Livingstone, founder of the supermarket research firm DJL Research, told the in September 2015.37 “This isn’t just David and Goliath. This is David and Goliath and Goliath is handing David a faulty slingshot.”38 In early November, only a few days before Albertsons was able to repurchase some of the Haggen stores, the director of the FTC’s Bureau of Competition defended the agency’s work on the divestiture plan. The high-ranking FTC official, Deborah Feinstein, responded to questions posed by the Santa Clarita Valley Business Journal about the closing of the Haggen stores. “We do a significant vetting process before recommending that the Commission accept a settlement,” Feinstein said. “The Commission felt comfortable here that Haggen would be an acceptable buyer.”39 Asked for details about the vetting process, Feinstein explained: “In this case we would have brought Haggen in and looked at their business plan, their finances, their management plan, their future plans to invest in stores, plans for stores that aren’t performing as well, their distribution capabilities, marketing plans, their pro forma, etc. We do our due diligence before we recommend to the Commission that they accept the consent [agreement] for public comment.40 This is not the first time that a company acquiring assets through an FTC divestiture order has soon thereafter ended up in bankruptcy court. When rental car giants Hertz and Dollar Thrifty were allowed to merge in 2012, the FTC conditioned its approval on Hertz spinning off its Advantage Rent a Car unit. By 2013, Advantage under its new ownership filed for bankruptcy, alleging that Hertz had overvalued the 24,000 vehicles it had leased to its new competitor.41 In an ironic twist, on January 9, 2015, a few weeks before approving the Albertsons divestiture plan, the FTC proposed a study of the effectiveness of prior merger cases involving divestitures or some other remedy to address anticompetitive concerns. 42 Intended to update a similar FTC report from 1999, the new study will focus on 90 FTC merger cases from 2006 through 2012, including the Hertz case.

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IMPACT ON FUTURE MERGERS

The longer-term question is what effect the collapse of Haggen might have on future retail mergers, especially when divestitures are proposed as a remedy for anticompetitive concerns. Arguably, one could posit that the effect might be somewhat limited, just as the Hertz case did not deter the FTC from continuing to approve divestiture plans following the bankruptcy filing of Advantage. However, that is the less likely outcome. More probable is that the FTC, at least in the immediate future, will feel a need to be more cautious and dubious about proposed divestitures. As most consumers buy groceries much more frequently than they rent cars, the Haggen collapse was a higher profile embarrassment for the FTC than the Advantage bankruptcy in the Hertz case. With many of the closed Haggen locations reopening as Albertsons-owned stores, they will serve as a renewed and regular reminder of the failure of the original divestiture plan. The consumers that the FTC sought to protect are likely to note that supermarket competition in many of those geographic markets has instead been reduced. Moreover, the FTC’s latest study of the effectiveness of past merger remedies should draw additional attention to the issue of divestitures. It seems only prudent for the FTC to be more cautious and skeptical about current and future divestiture plans. That is what at least some antitrust lawyers are already predicting. “They will reassess what additional scrutiny they’re going to have to put into these,” Ted Hennebery, an antitrust lawyer at Morgan Lewis, told Law360.43 “By the same token, that means those proposing remedies are going to have to make sure they can make the case that the prospective buyer is viable. It’s going to put an additional burden on those proposing.”44

CONCLUSION

The bankruptcy filing of the Haggen chain, and the corresponding failure of part of the divestiture plan in the Albertsons-Safeway merger, could have a major effect on the viability of future mergers in the United States. Moreover, that impact could stretch far beyond the somewhat narrow field of retail mergers, as divestitures are proposed as an antitrust remedy for mergers in many different industries. However, just how longstanding that impact will be is a more complicated question. Remembering that the interpretation and enforcement of antitrust law in the United States can shift with presidential administrations and even economic circumstances, it is hazardous to make any long-term predictions about antitrust outcomes. Antitrust policy is not quite as ephemeral as day-old bread in a supermarket. But any antitrust policy prediction would be wise to carry a “best by” expiration date on its label. For the near future, then, one might expect that proposed mergers of large companies, and in particular divestiture plans to address government concerns about excessive market concentration, will be subject to far more skeptical scrutiny from U.S. antitrust regulators.

ENDNOTES

1 James F. Peltz, DuPont, Dow announce merger worth $130 billion, L.A. TIMES, Dec. 12, 2015, at C1. 2 Pub. L. 63–212, 38 Stat. 730, codified at 15 U.S.C. §§ 12–27, 29 U.S.C. §§ 52–53. 3 Standard Oil Co. of N.J. v. U.S., 221 U.S. 1 (1911). In that landmark case involving the breakup of Standard Oil, the Supreme Court ruled that only “unreasonable” combinations and contracts in restraints of trade were prohibited by the Sherman Act.

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4 15 U.S.C. § 18. 5 Id. 6 15 U.S.C. § 18(a). The monetary threshold for the size of the merger is adjusted annually. In simple terms, in 2016 most transactions valued at more than $78.2 million are subject to this pre-merger review.

7 Thomas Catan, This Takeover Battle Pits Bureaucrat vs. Bureaucrat, WALL ST. J., Apr. 12, 2011, at A1. 8 Barack Obama, Statement of Senator Barack Obama for the American Antitrust Institute, Sept. 27, 2007, available at http://www.antitrustinstitute.org/archives/files/aai-%20Presidential%20campaign%20-%20Obama%209-07_092720071759.pdf 9 Id.

10 Dana Mattioli and Dana Cimilluca, Cerberus Agrees to Buy Safeway for $9 Billion, WALL ST. J., Mar. 7, 2014. 11 Press Release, Safeway and Albertsons Announce Definitive Merger Agreement (Mar. 6, 2014), available at http://investor.safeway.com/phoenix.zhtml?c=64607&p=irol-newsArticle&ID=1907031 12 Id.

13 Liz Hoffman, Takeaways from the Safeway/Cerberus Proxy, MoneyBeat blog, WALL ST. J., Apr. 21, 2014, available at http://blogs.wsj.com/moneybeat/2014/04/21/takeaways-from-the-safewaycerberus-proxy/

14 Annie Gasparro, Deal Offers Safeway Scope to Think Big, Act Locally, WALL ST. J., Mar. 10, 2014, at B1. 15 Id. 16 FTC Complaint, In the Matter of Cerberus Institutional Partners V, L.P., Jan. 27, 2015, at 2, available at https://www.ftc.gov/enforcement/cases-proceedings/141-0108/cerberus-institutional-partners-v-lp-ab-acquisition-llc. 17 Id. 18 Id. 19 FTC Analysis of Proposed Consent Order To Aid Public Comment, 80 Fed. Reg. 5753 (Feb. 3, 2015), at 5754. 20 FTC Complaint, supra note 16, at 4. 21 80 Fed. Reg. 5753, at 5756. 22 Press Release, Haggen Announces Senior Executives to Lead Historic Rollout (Mar. 19, 2015), available at http://www.haggen.com/press-releases/haggen-announces-senior-executives-to-lead-historic-rollout/

23 Shan Li and Whip Villarreal, Grocery chain Haggen laying off workers as it struggles in Southland, L.A. TIMES, July 16, 2015, available at http://www.latimes.com/business/la-fi-haggen-struggles-20150716-story.html

24 Shan Li, Grocer Haggen closing 27 stores, including 16 California supermarkets, L.A. TIMES, Aug. 14, 2015, available at http://www.latimes.com/business/la-fi-haggen-store-closings-20150814-story.html 25 Haggen Updates, UFCW Local 770, Aug. 24, 2015, available at http://www.ufcw770.org/haggen-updates

26 Anna Marum, Albertsons is suing Haggen over $41 million in grocery inventory, OREGONIAN, July 21, 2015, available at http://www.oregonlive.com/window-shop/index.ssf/2015/07/albertsons_sues_haggen.html.

27 Angel Gonzalez, Haggen sues Albertsons for $1 billion over big grocery deal, SEATTLE TIMES, Sept. 2, 2015, available at http://www.seattletimes.com/business/retail/haggen-sues-albertsons-for-1-billion-over-big-grocery-deal/ 28 Press Release, Haggen Sues Albertsons for Damages (Sept. 1, 2015), available at http://www.haggen.com/ haggen-sues- albertsons/

29 Angel Gonzalez, Albertsons settles Haggen’s $1 billion lawsuit for $5.75 million, SEATTLE TIMES, Jan. 22, 2106, available at http://www.seattletimes.com/business/retail/albertsons-settles-haggens-1-billion-lawsuit-for-575-million/

30 Peg Brickley, West Coast Grocer Haggen Files for Chapter 11 Bankruptcy, WALL ST. J., Sept. 9, 2015, available at http://www.wsj.com/articles/west-coast-grocer-haggen-files-for-chapter-11-bankruptcy-1441798163. The retail consultant quoted in the article is Burt Flickinger, managing director of the Strategic Resource Group consulting firm.

31 Brent Kendall and Peg Brickley, Albertsons Regains Stores, WALL ST. J., Nov. 25, 2015, at B3. 32 Id.

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33 Id. 34 Int’l Shoe v. FTC, 280 U.S. 291 (1930).

35 Angel Gonzalez, Haggen agrees to sell core stores to Albertsons for $106M, SEATTLE TIMES, March 11, 2016, available at http://www.seattletimes.com/business/retail/haggen-agrees-to-sell-core-stores-to-albertsons/ 36 80 Fed. Reg. 5753, at 5756.

37 Shan Li and Andrew Khouri, Grocery chain Haggen is leaving California, Nevada, and Arizona, L.A. TIMES, Sept. 25, 2015, at C1. 38 Id.

39 Jana Adkins, Q&A with the FTC on Haggen Acquisition, SANTA CLARITA VALLEY BUS. J., Nov. 3, 2015, available at http://www.signalscv.com/section/24/article/144436/ 40 Id.

41 Brent Kendall and Jacqueline Palank, How the FTC’s Hertz Antitrust Fix Went Flat, WALL ST. J., Dec. 8, 2013, available at http://www.wsj.com/articles/SB10001424052702303330204579246281764302824 42 Press Release, FTC Proposes to Study Merger Remedies (Jan. 9, 2015), available at https://www.ftc.gov/news-events/press- releases/2015/01/ftc-proposes-study-merger-remedies

43 Melissa Lipman, Bankrupt Grocer May Push FTC to Dig Deeper on Divestitures, LAW360, Dec. 4, 2015, available at http://www.law360.com/articles/734016/bankrupt-grocer-may-push-ftc-to-dig-deeper-on-divestitures 44 Id.

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