Locations to be sold represent 4.1% of total U.S. store count
BRUSSELS — The U.S. subsidiaries of Delhaize Group and Ahold NV have reached agreements with buyers to divest 86 stores in connection with the companies’ pending merger.
Delhaize and Ahold said Thursday that all of the store divestitures — which includes locations from both companies’ U.S. supermarket chains — must be approved by the Federal Trade Commission. The Europe-based food and drug retailers reiterated that they expect to receive FTC clearance and complete their $29 billion merger deal, announced in June 2015, by the end of July.
Under the agreements, Weis Markets Inc. is purchasing 38 Food Lion stores in Delaware, Maryland and Virginia, and Supervalu Inc. is buying 22 Food Lion stores in Maryland, Pennsylvania, Virginia and West Virginia. Publix Super Markets Inc. has agreed to acquire 10 Martin’s stores in Richmond, Va.
In addition, Big Y Foods Inc. is slated to buy eight Hannaford stores in eastern Massachusetts, while Tops Markets (based in New York), is purchasing one Stop & Shop store in Massachusetts plus three Stop & Shop stores and two Hannaford stores in New York. New Albertson’s Inc. (part of Albertsons Cos.) has agreed to acquire one Giant Food store in Salisbury, Md., and Saubel’s Markets plans to buy one Food Lion store in York, Pa.
Delhaize and Ahold reported that the stores being divested represent 4.1% of their total combined U.S. store count and 3.2% of their combined U.S. 2015 net sales. Plans call for the divested stores to be converted to the buyers’ banners.
“Selling stores is a difficult part of any merger process, given the impact on our associates, customers and communities in which we operate,” Frans Muller, president and chief executive officer of Delhaize Group, said in a statement. “We believe we have made every effort to identify strong buyers for these locations, and we want to thank our loyal associates and customers who have shopped our stores and supported us for so many years.”
The combined company — to be called Ahold Delhaize — will have more than 6,500 stores internationally and roughly 2,000 stores in the United States. In the U.S., Ahold Delhaize also would be the 11th largest retail pharmacy operator by location, with more than 700 pharmacies.
“Upon the completion of the merger, we will continue to maintain our local Food Lion and Hannaford brands,” added Muller, who is slated to serve as deputy CEO and chief integration officer of Ahold Delhaize. “However, our new company scale will enable us to accelerate our local market strategies to better serve our customers with nearly 2,000 stores along the East Coast in the United States.”
Weis Markets said Thursday that it expects to complete the conversion process for most of the 38 Food Lion stores in September and October.
“This transaction provides us the opportunity to expand into markets that are contiguous to our current trade area, particularly in Maryland where we are adding 21 stores— essentially doubling our store count in a state where we have steadily grown in recent years,” stated Weis Markets chairman and CEO Jonathan Weis. “We’re also looking forward to expanding our operations into two adjacent states with the addition of 13 stores in Virginia and four in Delaware.”
The 22 Food Lion stores being acquired by Supervalu are in northern West Virginia, western Maryland, south central Pennsylvania and northwestern Virginia. Supervalu said these stores will be converted to its Shop ‘N Save format and initially will be operated by the company. Supervalu added that it’s in talks with wholesale customers and the FTC about ways for its wholesale customers to have an interest in these stores.
“I’m pleased that Supervalu will acquire these stores, which should provide excellent opportunities for our wholesale customers, who were unable to buy them outright,” commented Supervalu president and CEO Mark Gross. “The stores will operate under our Shop ‘N Save format, which we believe is a great format for us and our wholesale customers.”