Supreme Court to Decide on Challenged Merger of Lucky, Alpha Beta Markets
The Supreme Court today stepped into a dispute over the merger of the Lucky and Alpha Beta supermarket chains that would create the largest grocery group in the country.
The court agreed to hear the case brought by the State of California challenging the merger of a division of American Stores and Lucky stores.
American Stores, which operates 252 Alpha Beta and Skaggs Alpha Beta stores in California and is headquartered in Salt Lake City, purchased Lucky’s 550-store chain in June, 1988, for $2.5 billion, or $65 a share.
Lucky Stores is based in Dublin, Calif., 40 miles east of San Francisco.
Lucky’s merger with Alpha Beta, California’s fourth-largest supermarket chain, would give American Stores about 27% of the supermarket business in California and would make American Stores owner of the largest supermarket chain in the country, according to court documents.
American Stores said California customers would save more than $50 million a year because of increased efficiency from the merger.
But California Atty. Gen. John K. Van de Kamp opposed the merger on antitrust grounds, arguing it would cost consumers $400 million a year.
He said the merger would allow American Stores to control prices by eliminating competition.
A federal judge had ordered that the stores continue to be operated separately, but the U.S. 9th Circuit Court of Appeals reversed that ruling. The appeals court said California officials, if they had moved quickly enough, could have prevented the merger. But the appeals court said only the federal government, not states and private citizens, has the power to break up mergers after financial arrangements are completed.
However, that ruling was stayed by Justice Sandra Day O’Connor in August, pending further high court action.
In other action, the court:
--Turned away an appeal by a political action committee linked to fringe presidential candidate Lyndon LaRouche. It faces having to pay $2.7 million in contempt-of-court fines stemming from a federal mail fraud and conspiracy prosecution.
--Rejected an appeal by a right-to-work group that sought to limit the power of unions to collect dues from non-members. The court, without comment, refused to hear arguments in an Illinois case that the group was treated unfairly by a federal appeals court.
--Refused to free Pan American World Airways from having to pay $951,500 plus interest to two families of 1974 crash victims. The justices, without comment, left intact the awards stemming from the April 22, 1974, crash in Indonesia of a Pan Am plane flying from Hong Kong to Los Angeles. All 96 passengers and 11 crew members died in the accident.
