Colorado  filed suit in Denver District Court to block the $24.6 billion proposed merger between Kroger and Albertsons, two of the largest supermarket chains in Colorado. Kroger operates 148 King Soopers and City Market stores and Albertsons operates 105 Safeway and Albertsons stores in the state. According to the complaint, the merger would eliminate head-to-head competition between Kroger and Albertsons and consolidate an already heavily concentrated market. The suit also challenges an illegal “no-poach” agreement between the two companies during a 2022 strike when employee movement was a threat to Kroger’s operations. The parties had propsed divestiture of 413 stores and other assets nationwide to C&S Wholesale Grocers, a privately held wholesale supplier that currently operates 23 stores. According to the complaint, the proposal would not alleviate the anticompetitive effects of the merger, echoing past grocery store divestiture plans. First, C&S has insufficient retail grocery experience to take on a divestiture of this size. Second, there are not enough stores to allow C&S to effectively compete with Kroger post-merger the way that Albertsons does today. Third, a transition agreement makes C&S reliant on Kroger for up to two years for pricing, pharmacy, promotions, loyalty programs, and IT infrastructure, diminishing competition between the companies. In addition to challenging the merger, the state also sued the two companies for a no-poach agreement entered into during a strike at Kroger’s stores in Colorado. The parties agreed that Safeway would not hire any King Soopers employees and would not solicit any of King Soopers’ pharmacy customers, according to an email between company executives leading up to the strike. Such no-poach and non-solicitation agreements are illegal under the Colorado State Antitrust Act because they are agreements to not compete. The suit seeks a permanent injunction to block the merger and $1 million in civil penalties for the no-poach agreement violations.