A U.S. district judge in Oregon has blocked a $25 billion bid by supermarket giant Kroger to acquire rival Albertsons after ruling that the Federal Trade Commission’s concerns about the merger’s impact on market consolidation were legitimate.

Judge Adrienne Nelson said Tuesday afternoon that a merger between the two companies would ultimately harm consumers.

The two companies “face significant head-to-head competition, and the proposed combination would eliminate that competition,” Ferguson wrote. As a result, the proposed merger would likely lead to results that would be “unilaterally harmful” to consumers and is therefore “presumably unlawful”.

Judge Ferguson also ruled that the merger was harmful to workers, arguing that greater consolidation would reduce workers’ bargaining power.

Albertson said in a statement that it was “disappointed by the U.S. District Court’s decision to grant the FTC’s request for a preliminary injunction.”

“We believe we have clearly demonstrated throughout the process how the proposed merger would increase competition, reduce prices, increase employee wages, protect union jobs and improve the customer shopping experience. We are carefully reviewing the court’s opinion and evaluating our options under the merger agreement,” the grocery chain said.

A Kroger spokesman also expressed disappointment in the ruling, saying the company is “currently evaluating its options.”

Cincinnati-based Kroger said a court ruling like this would effectively derail the merger.

The FTC welcomed the decision, saying the agency had “achieved a major victory for the American people by successfully blocking Kroger’s acquisition of Albertsons.”

“This victory has a direct, tangible impact on the lives of millions of Americans who shop for everyday needs at Kroger or Albertsons grocery stores, whether at Fry’s in Arizona, Von’s in Southern California or Jewel-Osco in Illinois.” said the FTC in a statement.

Kroger shares closed up 5% on Tuesday, while shares of Boise-based Albertsons closed 2% lower.

Kroger had argued the deal was necessary to continue competing with major retailers like Walmart and Target, as well as Amazon, which have significantly expanded their grocery business.

However, Nelson said supermarkets still represented a distinct niche market within the US consumer landscape, the impact of which would need to be taken into account by the proposed merger.

The ruling represents a victory for the Biden administration and particularly for FTC Chairwoman Lina Khan, who has taken an unprecedentedly aggressive approach to fighting mergers that could lead to the creation of monopolies.