(Bloomberg) -- A Colorado judge issued an order temporarily blocking the proposed $25 billion merger of Kroger Co. and Albertsons Cos., which has been challenged by the state attorney general.
At a hearing in Denver on Thursday, Judge Andrew J. Luxen granted a preliminary injunction halting the deal and cancelled a hearing that was scheduled for Aug. 12. Instead, Luxen will oversee a two-week trial on the merits of the proposed tie-up beginning on Sept. 30.
The two supermarket operators agreed to delay closing their proposed deal until after the judge rules.
A Kroger spokeswoman said the companies looked forward to defending the merger at trial. Albertsons declined to comment.
The Federal Trade Commission and a group of states have separately sued to challenge the deal in Oregon federal court. A hearing in that case is set to begin on Aug. 26.
Opponents of the deal argue it would harm consumers by eliminating competition on price, quality and service. The FTC also says it would give the grocers increased leverage over workers, slowing wage growth and worsening benefits.
Kroger and Albertsons say the merger is necessary for them to compete as consumers increasingly turn to larger, non-unionized rivals like Amazon.com Inc., Walmart Inc. and Costco Wholesale Corp. for groceries.
--With assistance from Jaewon Kang.
(Updates with company comments beginning in fourth paragraph.)
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