On July 8, 2013, The Kroger Co. (Kroger) agreed to acquire regional supermarket operator Harris Teeter Supermarkets, Inc., in an all-cash transaction valued at $2.5 billion. The parties allocated antitrust risk in the agreement. The merger agreement provides that Kroger must pay a reverse break-up fee of $200 million (8.00% of the deal value) if the agreement is terminated for failure to obtain antitrust approval. In the antitrust efforts covenants, the agreement provides that Kroger is not obligated to take any divestiture actions that would constitute "a material reduction in the reasonably anticipated economic benefits [of the merger to Kroger]…measured over a commercially reasonable period." However, Kroger must still pay the reverse break-up fee if it terminates the agreement as a result of a demand from a governmental entity for such divestitures. Essentially, Kroger has assumed the risk of being asked to make divestitures of up to $200 million in value.

For a summary of this deal, see What's Market, The Kroger Co./Harris Teeter Supermarkets, Inc. Antitrust Risk-shifting Summary in the What's Market antitrust risk-shifting database.