Royal Ahold has agreed to acquire Delhaize Group for about €9.32 billion in shares, creating the fifth largest US supermarket retailer in the industry's biggest transaction for almost a decade.
The deal, which follows more than a month of talks between the European owners of the Stop and Shop and Food Lion chains, will create a company based in Ahold's Dutch homeland and run by its chief executive officer Dick Boer.
Ahold investors will own 61 per cent of the enlarged group. “Ahold is clearly taking the lead in this transaction,” said Alan Vandenberghe, an analyst at KBC Securities. “Our first take is that the merger agreement comes short of expectations for Delhaize investors.”
Ahold shares rose as much as 4.8 per cent, while Delhaize dropped as much as 5.4 per cent, erasing part of Tuesday’s 8.4 per cent gain after the deal was reported to be close.
The merged business, to be called Ahold Delhaize, will have annual revenue exceeding €54 billion from more than 6,500 stores worldwide, including Albert Heijn in the Netherlands and Tom and Co in Belgium.
The combination follows years of speculation and has been hastened by increased competition for both grocers in the US from discounters such as Wal-Mart and Aldi.
Ahold and Delhaize run supermarkets on the US east coast in addition to their neighboring home markets.
