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TOP COURT TO HEAR LUCKY CASE

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The Supreme Court said Monday it would hear an appeal by California seeking to keep the operations of Lucky Stores Inc. separate from American Stores Inc. while the state challenges the merger of the two big supermarket chains on charges of violating antitrust laws.

California Attorney General John Van De Kamp has been trying to block American Stores' $2.5-billion buyout of Lucky on the grounds that the deal will drive up consumer food prices by $400 million a year due to decreased competition.The merger, agreed to last year and approved by the Federal Trade Commission, combines Lucky, the largest supermarket chain in the state, and Salt Lake City-based American Stores' Alpha Beta food chain, the fourth largest chain in California. Together, the chains have more than 550 stores.

The two companies argued that the deal does not violate antitrust laws and said that California customers would save about $50 million a year from increased efficiency.

The Supreme Court will schedule oral arguments in the case, with a decision expected before the end of its term in June.