Kroger, the grocery giant announced Friday that it would acquire Albertsons in a $24.6 million deal that could transform the American supermarket market. Officials will approve the deal, which would bring together two of America’s biggest supermarket chains and create a corporate giant that generates nearly $209 billion annually.

This acquisition was made partly to take on Walmart. It comes at a time when record inflation continues to squeeze people’s pockets and regulators are trying to limit the power of large corporations. There are many questions that remain about this potentially disruptive deal. These are just a few.

Kroger and Albertsons are merging.

Both retailers are looking to grow to compete with Walmart, which is the largest US grocer by revenue. Both retailers face new challenges due to rising inflation and long supply chain delays. Although Kroger’s financial results are strong, Albertsons stock fell about 10% over the past year.

Kroger was established in 1883 and operates over 2,750 grocery stores throughout the United States. Its headquarters is located in Cincinnati. The company has a market capitalization around $32 billion. Its brands include Harris Teeter, Dillons, Ralphs, and Ralphs.

Albertsons, which is based in Boise in Idaho and was founded in 1939, operates 2,200 supermarkets that are known as Albertsons and Safeway. Its market capitalization is approximately $15 billion.

The grocers announced that they will be able save millions on operating costs and have greater bargaining power with their suppliers together. Analysts believe that the deal will be driven by total cost savings. Retailers estimate they could save $1 billion.

What impact will this deal have on food prices?

Kroger and Albertsons claim that their larger size and bargaining power will allow them to lower prices and then pass the savings on to customers. However, lawmakers, regulators, and consumer advocates worry that companies may simply redirect profits to shareholders.

Orley C. Ashenfelter of Princeton and Daniel S. Hosken from the Federal Trade Commission conducted a 2008 study that found prices had increased between 3 to 7 percent in four of five mergers. However, the authors warned that this study did not reflect the full impact of all deals. It is not clear if the dynamics have changed over the years.

However, any price increase could cause a severe problem as food prices continue to rise. According to the Bureau of Labor Statistics, the cost of food in the United States increased 11 percent last month compared to the previous year.

On Friday, the companies suggested that there might not be a single cost-savings strategy for everyone.

In an analyst call, Rodney McMullen (Kroger’s chief executive) stated that pricing is determined market-by-market.

What will be the political response?

It is likely that the midterm elections will be hot because of the attention paid to inflation, food prices, and corporate consolidation. Independent of Vermont Senator Bernie Sanders called the deal an “absolute catastrophe”.

Mike Lee, the top Republican on the Senate antitrust subcommittee said Friday in a statement that he would do all he could to “protect consumers against anticompetitive mergers which could further exacerbate our financial strain in the grocery store checkout aisle.”

A White House official stated that the White House does not comment on specific transactions that might be subject to review federal agencies. Peter Kaplan, a spokesperson for the Federal Trade Commission declined to comment.

What are the plans of companies to placate regulators?

Kroger and Albertsons announced that they would sell their stores to rivals to address concerns raised by regulators about the overlap between the two grocers, especially on the West Coast. If necessary, they said they could also spin off as many as 375 stores to form a separate company.

However, analysts on Friday pressed Kroger executives to determine if the plan was adequate and questioned if they would be required sell more stores.

However, legal experts say it may be difficult for Kroger or Albertsons to argue that they can foster competition while simultaneously growing to take on Walmart.

“The argument kinda says we’re going down on a lot competition and there will only be a few big players who effectively compete to most consumers,” said Daniel Rubinfeld (a New York University law professor who has studied mergers).

Investors are not optimistic about the chances of a successful merger between these companies. Kroger shares ended Friday trading down 7 percent. Albertsons shares fell more than 8 percent.

What will regulators be looking for?

Over the last few decades, the grocery sector has been consolidated in large ways through mergers. Many have expressed concern that too many corporations hold too much power to set prices.

Kroger and Albertsons were among the most active acquirers of recent years. These include an $8 billion Fred Meyer deal (Kroger 1998), a $2.5 Billion Harris Teeter purchase (Kroger 2013), and a $9 Billion Safeway deal (Albertsons 2015).

Most likely, the F.T.C will examine what claims chains made about these earlier deals and whether they followed through. The F.T.C will also examine whether Kroger or Albertsons can make room for a viable competitor by selling stores in areas where they overlap.

These efforts have had a mixed record. These smaller competitors may not always be able to expand into these markets. Additionally, the sellers of those stores might not want a viable competitor.

Haggen, a Bellingham-based retailer, purchased more than 100 Albertsons stores to get approval for the Safeway merger.

Haggen filed for bankruptcy a year later and blamed Albertsons. (Albertsons later purchased 33 of the stores from the bankrupt company.

What now?

Both companies’ boards unanimously approved the agreement. The only thing left is regulatory approval.

It is not clear if the F.T.C. It is unclear if the F.T.C. A regulator may try to stop the merger. Companies will have to decide whether or not they want to go through the lengthy and expensive process of trying to prove that it is better for their shareholders, customers, and themselves. Sometimes they just walk away to avoid all the hassle.

F.T.C. A number of retail deals have been blocked by the F.T.C. After a federal judge ruled in favor the F.T.C’s blocking of their $3.5 billion agreement, Sysco and US Foods pulled out of their $3.5 Billion deal.

The F.T.C. also blocked a second attempt by Office Depot and Staples to merge that year. Office Depot and Staples were unable to merge again in the same year. Rite Aid and Walgreens pulled out of their $5 billion deal in 2017, before the F.T.C. Officially weigh in.

According to the terms of the deal, Kroger will pay Albertsons $600 Million if the deal is canceled due to antitrust issues.

Reporting was done by Jordyn Holman, Julie Creswell, David McCabe and Julie Creswell.

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