Albertsons Cos. said it filed a lawsuit against Kroger Co., claiming it failed to exercise “best efforts” and take “any and all actions” needed to secure regulatory approval for the companies’ proposed $24.6 billion deal.

Albertsons said in a statement that it’s seeking “billions of dollars in damages from Kroger to make Albertsons and its shareholders whole.” In addition to a $600 million termination fee, the grocery chain wants compensation for the “multiple years and hundreds of millions of dollars it devoted to obtaining approval for the merger.”

Shares of Albertsons rose 1% at 9:50 a.m. in New York trading December 11. Kroger shares rose 1.8%.  

In a statement, Kroger said Albertsons’ claims are baseless and without merit. It added that Albertsons isn’t entitled to the merger break fee and that Albertsons is seeking to “deflect responsibility following Kroger’s written notification of Albertsons’ multiple breaches of the agreement.” Kroger’s board is evaluating the next steps for the company.

Kroger and Albertsons had agreed to the tie-up in October 2022 , saying it would help them compete better against Amazon.com Inc., Walmart Inc. and other bigger, non-unionized rivals. It would have united Kroger, the nation’s biggest grocery company, with Albertsons, the second biggest, to create a company with more than 4,000 stores across 48 states and Washington, DC.

The Federal Trade Commission sued to blocked the deal in February, arguing that it violates U.S. antitrust law, and that a divestiture of hundreds of stores to C&S Wholesale Grocers Inc. wouldn’t be enough to replace the lost competition. A federal judge on December 10 blocked the deal, siding with the FTC and arguing it would lessen competition and raise prices for US shoppers. A Washington judge in Seattle on December 10 blocked the deal in that state.

Albertsons said December 11 that Kroger “willfully” breached the merger agreement by refusing to divest assets needed for antitrust approval, ignoring feedback from regulators and rejecting stronger divestiture buyers, among other reasons. Boise, Idaho-based Albertsons said it was exercising its right to terminate the deal.

Chief executive officer Vivek Sankaran said Albertsons is disappointed and starting a new chapter with a strong record after expanding its core business and other areas. This includes investing in stores, technology and employees, while expanding its online business.

The company expects comparable sales to grow 1.8% to 2.2% in fiscal 2024. It said it will provide further details on future plans no later than January, when it reports quarterly earnings. Albertsons and C&S declined to comment further.