The Federal Commerce Fee and several other state attorneys normal on Monday sued to dam Kroger, the grocery store large, from finishing its $24.6 billion acquisition of the grocery chain Albertsons, saying the deal would harm competitors within the business.

The company stated the deal, which might be the biggest grocery store merger in U.S. historical past, would almost definitely end in greater costs for groceries for customers and, with fewer supermarkets, cut back the power for grocery-store staff to barter greater wages and higher working circumstances.

“This grocery store mega-merger comes as American customers have seen the price of groceries rise steadily over the previous few years,” Henry Liu, director of the F.T.C.’s Bureau of Competitors, stated in a information launch. “Kroger’s acquisition of Albertsons would result in extra grocery value hikes for on a regular basis items, additional exacerbating the monetary pressure customers throughout the nation face in the present day.”

The F.T.C.’s federal lawsuit was joined by attorneys normal from Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming and the District of Columbia.

The lawsuit is the most recent transfer by the Biden administration to take a harder stance on mergers. In recent times it has challenged a number of large offers, together with the drug maker Amgen’s $27.8 billion acquisition of the pharmaceutical firm Horizon Therapeutics; JetBlue’s proposed $3.8 billion buy of Spirit Airways; and Microsoft’s $70 billion acquisition of the online game maker Activision Blizzard.

However in lots of instances the F.T.C. has misplaced in courtroom, together with in its try to dam the Microsoft merger. (The regulator has appealed the Microsoft ruling.) Kroger stated in an announcement that the F.T.C.’s transfer to dam the merger would truly hurt buyers and grocery retailer staff.

“The F.T.C.’s choice makes it extra probably that America’s customers will see greater meals costs and fewer grocery shops at a time when communities throughout the nation are already dealing with excessive inflation and meals deserts,” the corporate stated.

Albertsons echoed these sentiments in an announcement of its personal. It added that if the F.T.C. efficiently blocked the merger, “it could be hurting prospects and serving to strengthen bigger, multichannel retailers comparable to Amazon, Walmart and Costco — the very firms the F.T.C. claims to be reining in — by permitting them to proceed growing their rising dominance of the grocery business.”

Each chains stated they seemed ahead to creating their case for the merger in courtroom.

Within the 16 months since Kroger introduced plans to accumulate Albertsons, the proposed merger has confronted opposition. Executives for the grocery store behemoths — two of the largest grocery retailer chains in america — argued that the merger was obligatory for them to compete in opposition to big-box retailers like Walmart, Costco and Amazon. These retailers, the executives stated, use their dimension to barter higher costs with producers and suppliers, which permits them to promote cereals, yogurts, pastas and different staples to customers at decrease costs.

However a refrain of critics, together with shopper advocates, politicians, unions and unbiased grocery retailer chains, stated combining Kroger and Albertsons would create a strong large with income of greater than $200 billion and about 5,000 shops in 48 states and the District of Columbia. The chains have important overlap in some markets, like Chicago, Dallas Los Angeles and Seattle.

Kroger, primarily based in Cincinnati, operates 2,750 grocery shops throughout america beneath banners that embrace Ralphs, Dillons and Harris Teeter. Albertsons, primarily based in Boise, Idaho, runs 2,200 supermarkets beneath names like Albertsons, Safeway and Vons.

Jon Donenberg, a deputy director of President Biden’s Nationwide Financial Council, stated in an announcement that Mr. Biden believed that competitors was key to capitalism. “When massive companies aren’t checked by wholesome competitors, they too typically don’t go value financial savings on to customers and exploit their employees,” he stated.

As inflation continues to drive meals costs greater, critics stated, the proposed merger would give buyers in some areas little or no alternative about the place to purchase family staples. Others warned that with much less competitors, the merger would end in greater grocery costs and potential layoffs.

“This choice reveals that the F.T.C. understands how the outsized energy of huge retailers is damaging your complete meals system,” stated Stacy Mitchell, co-executive director on the Institute for Native Self-Reliance, a nonprofit advocate for unbiased companies. “These two giants already exert their energy as dominant consumers of meals and items by bullying suppliers into giving them reductions and advantages they don’t supply to smaller meals retailers.”

Marc Perrone, the president of the United Meals and Business Staff Worldwide Union, stated the guild would proceed to face “in opposition to any merger that may negatively affect our lots of of 1000’s of hardworking members who work at Kroger and Albertsons.”

Kroger stated later in an announcement that it could make investments $1 billion to lift wages and advantages and was dedicated to making sure there could be no layoffs or retailer closings associated to the merger.

In an effort to decrease a number of the issues in regards to the merger, Kroger and Albertsons announced plans in September to promote 413 shops throughout the nation to C&S Wholesale Grocers for $1.9 billion. The sale is contingent on the approval of the Kroger-Albertsons merger.

However the F.T.C. stated the divestiture proposal created a hodgepodge of unconnected shops and types that had been cobbled collectively and fell far wanting making a stand-alone enterprise that might compete in opposition to a mixed Kroger and Albertsons.

The F.T.C. additionally argued that high quality would probably decline at a mixed grocery store large. Presently, the 2 shops compete in opposition to one another by providing more energizing produce, versatile retailer and pharmacy hours, and curbside pickup companies. In the event that they merge, the inducement to compete by bettering product high quality and customer support would lower, the F.T.C. stated.

Critics additionally painted the proposed merger as a giant payday for Albertsons’ personal fairness house owners. Early final yr, after surviving a authorized problem introduced by the state legal professional normal in Washington, Albertsons made a particular dividend fee of $4 billion to its shareholders. The largest recipients of that dividend, which was funded via a mixture of money and debt that was added to Albertsons’ steadiness sheet, have been Albertsons’ personal fairness house owners, together with Cerberus, which, on the time, held 73 p.c of the corporate.