What happened

Shares of Albertsons Companies (ACI -0.22%) were taking a dive today after the cutoff to get a special dividend passed last night.

As a result, the price for its shares fell 24%, though that doesn't reflect any fundamental change in the business.

So what

Last week, Albertsons declared a special dividend of $6.85 a share in connection with its merger agreement with Kroger (KR 0.53%), setting a record date of Oct. 24. That means the ex-dividend date is today, so only shareholders who held the stock yesterday will receive the dividend.

Since the stock no longer represents the value of the special dividend, it fell by about $6.85.

There was other news out on Albertsons today as well. Several news outlets said the deal, which brings the nation's two largest pure-play supermarket operators together, could face substantial regulatory scrutiny.

A regulatory review could force the companies to sell off some stores to competitors in order to gain approval, among other accommodations. The companies have already agreed to sell up to 650 stores and separate a smaller subset of locations as an Albertsons subsidiary.

Together, the two companies have roughly 5,000 locations, or 13% share of the U.S. grocery market. Walmart is the leader with 22% share.  

Now what

Albertsons' decision to pay out a special dividend worth a quarter of its market cap seems like a clear sign of confidence that the deal will go through. Terms of the deal allow Kroger to walk away if it's forced to sell more than 650 stores, and it would pay Albertsons a breakup fee of $600 million if the deal were blocked.

That would only represent a fraction of the nearly $4 billion the company just paid out as a special dividend. 

On Oct. 14, Kroger agreed to pay $34.10 a share for Albertsons, though the $6.85 special dividend is subtracted from the total, making the offer now $27.25 a share. Albertsons is now trading at a discount of more than 20% from that price, indicating some skepticism that the deal will go through as negotiated.