Axios Pro Rata: Grocery grievance

1. Key Themes

Theme: Antitrust risk is reshaping M&A structuring and deal timing

Albertsons v. Kroger could rewrite merger agreement drafting

A Delaware Chancery trial over the failed grocery mega-deal may set precedent on who bears regulatory risk.

• "Albertsons has alleged that Kroger didn't take the necessary steps to secure antitrust approval for the $25 billion deal, and is asking the court for a whopping $9.3 billion in damages (including the $600 million termination fee)."
• "If Albertsons wins, particularly with a large judgment, it could change how future merger agreements are structured. For example, they might need to include detailed divestiture plans. Or language stating that termination fees are the only financial remedies available if a deal is blocked by regulators."

Shifting competitive landscape changes what regulators will tolerate

DoorDash/Instacart nearly happened in 2021 but was derailed by antitrust; the market definition has since changed.

• "A source confirms reports from 2021 that the companies got close to merging back then... but didn't tie the knot because of antitrust concerns."
• "The regulatory difference five years later, the source argues, is that Amazon and Walmart have become major players in grocery delivery."

Politically charged infrastructure mergers face labor scrutiny

• "The proposed $85 billion merger between railroads Union Pacific and Norfolk Southern has become a major issue in the Nebraska Senate race."
• "most workers at the two companies are represented by unions opposing the merger."

Theme: Defense/government spend is pulling enterprise software and startups in

Salesforce buys into battlefield software

• "It's not just Silicon Valley startups that want a piece of the Pentagon's bulging budget."
• "DOD officials reportedly are preparing to ask Congress for $1.1 trillion in new spending, whereas President Trump has requested $1.5 trillion."
• "Salesforce said its defense business is growing 80% year to year, and earlier this year entered a 10-year U.S. Army contract worth as much as $5.6 billion to modernize operations."

Theme: Capital is concentrating in AI "picks and shovels," vertical AI, and prediction markets at premium valuations

Mega-rounds for sovereign-backed AI and prediction markets

• "The Canadian government will invest up to C$1.6b into Cohere, a Toronto-based enterprise AI company that's raising a C$7b Series E round at a C$35.7b valuation."
• "Kalshi, the largest U.S. prediction market, raised $1b at a $40b post-money valuation."

Vertical/engineering AI seeds are large

• "Dulo, an SF-based engineering AI model developer led by Sebastian Thrun, raised $130m in seed funding from DST Global, Construct Capital, and Lowercarbon Capital."
• "Dream, a developer of AI models for construction, raised $17m in seed funding."
• "Wabi, an SF-based AI assistant maker, raised $55m at a $1.25b valuation."

Theme: Credit stress in software persists even as IPO and deal markets function

Distressed leveraged loans are surging

• "The share of leveraged loans trading at distressed levels has more than doubled since last year, suggesting that the SaaSpocalypse isn't really in the rearview mirror."
• "$131 billion of loans in Morningstar's Leveraged Loan Index were priced below 80 cents on the dollar. That's the most since May 2020."
• "That represents 8.3% of all outstanding loans, by dollar value — up from 4.3% at the end of 2025 and 3.4% a year ago."

2. Contrarian Perspectives

Kroger's argument: the deal was doomed regardless of effort. Against Albertsons' claim of breach, Kroger argues that regulators, not its conduct, killed the deal, and that it did make a good-faith divestiture offer.

• "Kroger calls that hogwash, arguing that the merger was 'doomed from the beginning' because of state and federal regulatory blowback. Moreover, it did make a major divestiture proposal."
• Implication: if the court accepts this, buyers get more protection when regulators block deals, which cuts against the trend of sellers extracting heavy regulatory-risk allocation.

The "SaaSpocalypse" is not over, even though software sentiment may look recovered. Debt markets are flashing warning signs that equity narratives may not capture.

• "The share of leveraged loans trading at distressed levels has more than doubled since last year, suggesting that the SaaSpocalypse isn't really in the rearview mirror."
• Distressed share rose to 8.3% from 4.3% at end of 2025, and the dollar figure is the highest since the pandemic sell-off.

Unicorn exits can be fire sales. Even a $1B-valued robotics startup backed by marquee investors can end up as a distressed sale.

• "10Beauty... acquired Nimble, a nail care robotics company that had raised $221m — most recently at a $1b valuation."
• "A buyside source tells me it was a fire sale: 'We took it off their hands.'"

3. Companies Identified

Albertsons / Kroger

• Description: U.S. supermarket chains whose $25B merger collapsed.
• Why mentioned: Case study in regulatory-risk allocation and merger litigation.
• Quotes: "Albertsons and Kroger today are scheduled to wrap witness testimony in a Delaware Chancery Court trial over their failed mega-merger, and deal lawyers are paying close attention to the outcome."

DoorDash / Instacart

• Description: Delivery platforms; DoorDash is buying Instacart for $17B.
• Why mentioned: A deal that nearly happened in 2021 at a much higher valuation, derailed by antitrust.
• Quotes: "Instacart at the time was valued at $39 billion by VCs, who would have gotten a premium."

D1 Capital Partners and Sequoia Capital (as Instacart holders)

• Description: Large pre-IPO Instacart investors.
• Why mentioned: Still hold meaningful stakes.
• Quotes: "two of Instacart's largest pre-IPO investors still own stakes: D1 Capital Partners (9.7%) and Sequoia Capital (8.1%)."

Union Pacific / Norfolk Southern

• Description: Railroads pursuing an $85B merger.
• Why mentioned: Political and labor flashpoint in the Nebraska Senate race.
• Quotes: "Ricketts supports the deal, arguing that it will lead to job gains and higher wages."

Salesforce / Rune Technologies

• Description: Enterprise software giant acquiring a predictive battlefield software developer.
• Why mentioned: Defense market entry; the BFD (big deal) of the day.
• Quotes: "Salesforce said its defense business is growing 80% year to year."

Cohere

• Description: Toronto enterprise AI company.
• Why mentioned: Government-backed sovereign AI champion raising a C$7B Series E.
• Quotes: "The Canadian government will invest up to C$1.6b into Cohere."

Kalshi

• Description: Largest U.S. prediction market.
• Why mentioned: $1B raise at a $40B post-money valuation.
• Quotes: "Wellington and Sequoia Capital led, joined by Baillie Gifford, Stripes, a16z, Coatue..."

Dulo

• Description: SF engineering AI model developer.
• Why mentioned: Outsized $130M seed.
• Quotes: "raised $130m in seed funding from DST Global, Construct Capital, and Lowercarbon Capital."

Wabi

• Description: SF AI assistant maker.
• Why mentioned: Unicorn valuation with celebrity-operator angel base.
• Quotes: "raised $55m at a $1.25b valuation. IVP led... Tobi Lütke, Marc Benioff, Marissa Mayer, Dick Costolo, and Alex Pall."

OPay

• Description: Africa-focused payments company (founded by Norway's Opera), listing on NYSE.
• Why mentioned: Profitable fintech IPO, but priced at the bottom of its range.
• Quotes: "The Lagos-based company reports $91m of net income on $467m in revenue for the first half of 2026."

Aspen Neuroscience / Bambusa Therapeutics

• Description: Biotech IPOs (Parkinson's stem cell therapies; bispecific antibodies).
• Why mentioned: Biotech IPO window open for Phase 1/2 companies.
• Quotes: "The Phase 1 biotech had raised $380m from OrbiMed (13.1% pre-IPO stake), Arch Venture Partners (12.3%)..." and "priced 10.56m shares at $16, versus plans to offer 9.4m shares at $15-$17."

10Beauty / Nimble

• Description: Beauty/nail-care robotics companies.
• Why mentioned: Cautionary tale of a unicorn fire sale.
• Quotes: "A buyside source tells me it was a fire sale: 'We took it off their hands.'"

Deepgram / Pipecat

• Description: Speech-to-text platform buying an open-source voice AI framework.
• Why mentioned: Consolidation in voice AI infrastructure.
• Quotes: "Deepgram, an SF-based speech-to-text platform valued by VCs at $1.3b, agreed to buy the maker of open-source voice AI framework Pipecat."

PAG / Evergrande Property Services

• Description: Asian investor buying a stake in the property services arm of failed Evergrande.
• Why mentioned: Distressed-asset opportunism in China real estate.
• Quotes: "PAG agreed to buy a 51% stake in Evergrande Property Services... for around US$514m."

BASF / Evonik

• Description: German specialty chemicals rivals.
• Why mentioned: Rejected hostile-style approach.
• Quotes: "Evonik rejected an €11.2b takeover offer from rival German specialty chemicals company BASF."

RedBird Capital Partners / Sound Ventures

• Description: Investment firm and Guy Oseary's venture firm.
• Why mentioned: New $1B partnership.
• Quotes: "formed a $1b investment partnership with Guy Oseary's Sound Ventures, focused on tech, media, and culture deals."

Mondelēz / Undercover Snacks; Ahold Delhaize / Tesco CEE; Valero / LyondellBasell

• Description: Corporate portfolio moves.
• Why mentioned: Strategic M&A (better-for-you snacks; European grocery; refinery site).
• Quotes: "Ahold Delhaize agreed to pay €1.7b for the Czech and Slovak arms of U.K. supermarket chain Tesco."

4. People Identified

Dan Osborn

• Description: Independent Senate candidate in Nebraska, former labor leader.
• Why mentioned: Using the Union Pacific/Norfolk Southern merger as a campaign issue.
• Quotes: "Independent candidate Dan Osborn, whom polls show has a puncher's chance at unseating Sen. Pete Ricketts, has argued that the deal could lead to decreased worker safety at Omaha-based Union Pacific."

Pete Ricketts

• Description: Incumbent Nebraska senator.
• Why mentioned: Supports the rail merger; received PAC contributions from both companies.
• Quotes: "He's also received campaign contributions from both companies, via PACs."

Sebastian Thrun

• Description: Leader of Dulo.
• Why mentioned: High-profile founder commanding a $130M seed.
• Quotes: "Dulo, an SF-based engineering AI model developer led by Sebastian Thrun."

Tarek Mansour

• Description: Kalshi CEO.
• Why mentioned: Speaking at Axios BFD.
• Quotes: "Kalshi CEO Tarek Mansour will join us at Axios BFD."

Maria Sharapova and Lia Dean

• Description: Tennis champion; Capital One president of banking and premium products.
• Why mentioned: Axios BFD speakers.
• Quotes: "tennis champ Maria Sharapova and Lia Dean, Capital One's president of banking and premium products, will join us at Axios BFD on Nov. 17."

Reva Nohria

• Description: Named CEO of General Catalyst's HATCo unit.
• Why mentioned: Leadership change after Daryl Tol's resignation.
• Quotes: "General Catalyst named Reva Nohria as CEO of its HATCo unit, following the resignation of Daryl Tol. She's been with GC since 2018."

Rocco Basilico / Leonardo Maria del Vecchio

• Description: Ray-Ban heir and his stepbrother.
• Why mentioned: Family dispute over a stake in the EssilorLuxottica holding group.
• Quotes: "rejected a €3.5b offer from his stepbrother Leonardo Maria del Vecchio for a 12.5% stake in the family investment group behind EssilorLuxottica."

Byron Allen

• Description: Media entrepreneur.
• Why mentioned: Quick exit from Starz stake.
• Quotes: "sold off the 10% stake in Starz that he acquired seven months ago."

Lewis Blakey

• Description: PE-focused partner moving from Weil Gotshal to Simpson Thacher London.
• Why mentioned: Senior legal talent move.
• Quotes: "stepping down as a PE-focused partner at Weil Gotshal to join the London office of Simpson Thacher."

Angel investors in Wabi (Tobi Lütke, Marc Benioff, Marissa Mayer, Dick Costolo, Alex Pall)

• Description: Prominent tech operators.
• Why mentioned: Signal of operator backing for consumer AI.
• Quotes: "joined by a16z, Forerunner Ventures, Amazon Alexa Fund, Tobi Lütke, Marc Benioff, Marissa Mayer, Dick Costolo, and Alex Pall."

5. Operating Insights

Draft regulatory-risk provisions explicitly in deal documents. The Albertsons/Kroger case shows that ambiguity over divestiture obligations can lead to nine-figure litigation.

• "they might need to include detailed divestiture plans. Or language stating that termination fees are the only financial remedies available if a deal is blocked by regulators."

Revisit "dead" deals when the competitive landscape changes. The market definition regulators use can shift as large players enter.

• "The regulatory difference five years later, the source argues, is that Amazon and Walmart have become major players in grocery delivery."

Defense is an expansion lane for enterprise software. Government budgets and long contracts can drive outsized growth.

• "Salesforce said its defense business is growing 80% year to year, and earlier this year entered a 10-year U.S. Army contract worth as much as $5.6 billion."

6. Overlooked Insights

Debt markets may be a better early-warning system than equity for software stress. The distress figure sits at a post-pandemic high while headline deal activity stays strong.

• "That's the most since May 2020, when the market was recovering from a pandemic sell-off."

Peak-valuation exits can lag badly: Instacart was once valued at $39B, yet sold years later at $17B. The gap highlights the cost of failed deals and missed windows for VCs.

• "DoorDash's $17 billion deal for Instacart almost happened years ago at a much higher price."