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Ahold, Delhaize plan to merge

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In U.S., combined company would operate more than 2,000 food stores

Ahold Delhaize merger_store signs_featured

 

BRUSSELS, Belgium, and ZAANDAM, the Netherlands — International food retailers Delhaize Group and Koninklijke Ahold N.V. plan to merge, forming a new company called Ahold Delhaize.

The companies said Wednesday that the agreement, being enacted through a merger of equals of Delhaize into Ahold, will create a food retailing giant with more than 6,500 stores and 375,000 employees and total net sales of €54.1 billion ($60.6 billion), serving over 50 million customers weekly in the United States and in Europe.

“This is a true merger of equals, combining two highly complementary businesses to create a world-leading food retailer. The transaction delivers a compelling value proposition for our shareholders, a superior offering for our customers and attractive opportunities for our associates,” Ahold chairman Jan Hommen and Delhaize chairman Mats Jansson said in a joint statement.

In the United States, the deal will bring together Delhaize America’s Food Lion and Hannaford supermarket chains with Ahold USA’s Stop & Shop, Giant Food, Giant Food Stores and Martin’s Food Markets grocery chains, as well as its Peapod online grocery delivery service.

Overall in the United States, the combined company would have 2,063 stores with sales of about $36.9 billion.

Ahold Delhaize will be based in the Netherlands and be governed by a two-tier board comprising a supervisory board (seven members from each company) and a management board. The day-to-day management will be handled by the executive committee.

Jansson will be the chairman of the supervisory board, and Hommen and Jacques de Vaucleroy will serve as vice chairmen. The management board of the combined company will encompass the chief executive officer, the deputy CEO, the chief financial officer and the three chief operating officers for the United States and Europe.

Dick Boer, currently CEO of Ahold, will be the CEO of the combined company, and Frans Muller, currently CEO of Delhaize, will be deputy CEO and chief integration officer. Ahold CFO Jeff Carr will serve as CFO of the combined company. Pierre Bouchut, currently CFO of Delhaize, will become chief operating officer for Europe.

Plans call for current COOs of Ahold and Delhaize in the United States, James McCann and Kevin Holt, respectively, to stay on as COOs of those businesses.

“The proposed merger with Delhaize is an exciting opportunity to create an even stronger and more innovative retail leader for our customers, associates and shareholders worldwide,” Ahold CEO Boer stated. “With extraordinary reach, diverse products and formats, and great people, we are bringing together two world-class organizations to deliver even more for the communities we serve. Our companies share common values, proud histories rooted in family entrepreneurship, and businesses that complement each other well. We look forward to working together to reach new levels of service and success.”

The transaction entails a cross-border legal merger of Delhaize into Ahold, in which Delhaize shareholders will receive 4.75 Ahold ordinary shares for each Delhaize ordinary share that they own. Ahold Delhaize shares are slated to be listed on both Euronext Amsterdam and Euronext Brussels after the deal is completed.

Ahold and Delhaize each plan to hold a general meeting of shareholders in the first half of 2016 to vote on the deal. Pending shareholder and regulatory approvals, the merger is expected to close in mid-2016.

“We believe that the proposed merger of Ahold and Delhaize will create significant value for all our stakeholders,” Delhaize CEO Muller stated. “Supported by our talented and committed associates, Ahold Delhaize aims to increase relevance in its local communities by improving the value proposition for its customers through assortment innovation and merchandising, a better shopping experience both in stores and online, investments in value and new store growth. We look forward to working closely with the Ahold team to implement a smooth integration process and realize the targeted synergies.”


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