Both companies confirmed Tuesday that they are engaged preliminary discussions to explore the opportunity of combining the two companies. “These discussions may or may not result in a future transaction,” the companies said in a joint statement.
If a deal is struck, it would unite Delhaize’s Food Lion and Hannaford grocery chains with Ahold’s Stop & Shop, Giant Food, Giant and Martin’s Food Market supermarket chains in the United States, creating the nation’s fifth-largest food retailer.
Both companies generate most of their revenue in the United States. A merger would establish a formidable supermarket competitor along the East Coast, where each is concentrated.
Ahold USA, the U.S. arm of Netherlands-based Royal Ahold N.V., operates 775 supermarkets in 14 states from Massachusetts to Virginia. Delhaize has 1,100 Food Lion stores in 10 states and 186 Hannaford stores in Massachusetts, Vermont, New Hampshire, Maine and New York.