Judge Blocks American Stores’ Acquisition of Lucky Markets

A federal judge today temporarily blocked the $2.5-billion acquisition of Lucky Stores Inc. by American Stores and scheduled further hearings on whether there should be a permanent injunction.

“The proposed acquisition threatens serious irreversible harm to the public interest within California, which outweighs any harm to defendants if the mergers are temporarily restrained,’ said U.S. District Judge David V. Kenyon in issuing a restraining order.

Kenyon prohibited American Stores, the parent company of Alpha Beta supermarkets, from launching a joint operation with Lucky until the matter is resolved. He said he will hold a hearing Sept. 16 to decide whether a permanent injunction will be issued.

Executives of American Stores were ordered to show cause at that time why they should not be barred from completing the merger, which has been tentatively approved by the Federal Trade Commission.

State Atty. Gen. John K. Van de Kamp had asked for the court order on grounds the acquisition of Lucky by American would lessen supermarket competition in California.

The judge’s ruling ordered American to refrain from selling, transferring or closing any retail grocery stores in the areas where both American and Lucky presently compete. The judge said American must continue the operations of Alpha Beta independently of Lucky stores and must refrain from supplying any Alpha Beta stores with the assets of the Lucky operation, or vice-versa.