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Kroger has reached a confidential settlement with C&S Wholesale Grocers over a disputed termination fee following the supermarket giant's abandoned $25 billion merger with Albertsons.

The settlement resolves claims that Kroger owed C&S $125 million if the deal fell through.

C&S, based in Keene, New Hampshire, was set to acquire nearly 600 stores divested by Kroger and Albertsons as part of the merger.

When the deal collapsed, C&S claimed it was owed a termination fee, prompting legal action against Kroger. Terms of the settlement remain confidential, USA Today said.

"We are pleased to resolve the claims from C&S, and we look forward to a friendly relationship with them going forward," said Kroger's interim CEO Ron Sargent.

He emphasized that the company remains focused on serving customers and running stores across the US.

The failed merger had stirred regulatory concerns, particularly over competition.

C&S's relatively modest retail presence raised doubts during antitrust reviews, with regulators noting the wholesaler would not be a strong enough competitor to counter a super-sized Kroger.

C&S executives faced scrutiny when reports showed they had joked about their own retail operations during hearings.

Kroger Settles C&S Lawsuit, But Legal Challenges With Albertsons Continue

Despite resolving the C&S lawsuit, Kroger still faces other legal challenges stemming from the merger attempt.

Albertsons has filed a lawsuit demanding a $600 million breakup fee, raising issues with Kroger's approach to obtaining regulatory approvals.

The circumstances surrounding former Kroger CEO Rodney McMullen's resignation earlier this year have also become a point of legal interest, as Albertsons and other parties question how internal ethics and leadership transitions influenced the merger process.

According to The Sun, industry analysts say the fallout from the failed merger may benefit consumers. "Consumers will persist in gaining advantages from the rivalry between Kroger and Albertsons, which can result in improved prices and services," said Alex Lubyansky, managing partner of Acquisition Stars.

The Federal Trade Commission similarly noted that the merger could have increased prices, so continued competition is seen as a positive outcome for shoppers.

Kroger maintains that C&S was not entitled to the $125 million fee due to alleged contract breaches and disagreements over regulatory actions during the merger process.

"We stand by our position and are pleased to have resolved this matter amicably," Sargent added.