Published on: June 24, 2015Netherlands-based Royal Ahold this morning announced that it will acquire Belgium-based Delhaize Group in an all-stock deal for about $10.4 billion (US), a move that will create the fifth biggest supermarket chain in the US.
The announcement says that "the merger will create a complementary base of more than 6,500 stores with 375,000 associates ... The combination, Ahold Delhaize, will be able to serve over 50 million customers per week in the United States and in Europe." The companies said that they believe that "the transaction will create significant value, with anticipated run-rate synergies of €500 million per year to be fully realized in the third year after completion."
According to the press release, "Mats Jansson, Chairman of Delhaize Group, will become Chairman of Ahold Delhaize. Jan Hommen, Chairman of Royal Ahold, and Jacques de Vaucleroy, Delhaize Group Director, will become Vice Chairmen of Ahold Delhaize. Dick Boer, Chief Executive Officer of Royal Ahold, will become Chief Executive Officer. Frans Muller, Chief Executive Officer of Delhaize Group, will become Deputy Chief Executive Officer and Chief Integration Officer."
The deal is expected to be completed mid-2016, following regulatory clearances, associated consultation procedures and shareholder approval.
According to Bloomberg, "Delhaize investors will receive 4.75 Ahold shares for each share they own, the European owners of the Stop & Shop and Food Lion chains said in statements Wednesday. Ahold investors will own 61 percent of the combined company."
- KC's View:
- It is early yet, and we don't know how this all will play out. But I'm going to take a moment to sing a familiar song from the same old hymnal ... if this transaction ends up being only about efficiencies and not about effectiveness, then it will not live up to its potential. It'll just be a bigger company, but not a better one.
That'd be a shame, and an opportunity lost.