Ahold Set to Acquire 50% of ICA Group, the Leading Scandinavian Food Retailer.

ZAANDAM, The Netherlands / STOCKHOLM, Sweden / OSLO, Norway / --(BUSINESS WIRE)--Dec. 9, 1999--

Addition of 3,100 stores with net sales of EUR 6.7 billion

strengthens Ahold's European position

Highlights of the announcement:

-- Ahold signs heads of agreement to acquire 50% of ICA Group,

supermarket leader in Scandinavia

-- 3,100 additional stores with net sales of EUR 6.7 billion boosts

Ahold's sales in Europe to approximately EUR 19 billion

-- In addition, 50% stake of ICA Group in 1,500 Statoil gasoline

stations with sales of EUR 2.5 billion

-- Joint venture offers significant opportunities for synergies,

economies of scale and regional growth

-- Ahold to pay EUR 1.8 billion to ICA shareholders

-- Funding consistent with existing Ahold financing policy

-- Transaction will contribute to Ahold EPS growth in 2000 and

thereafter

Royal Ahold (NYSE: AHO), the international food retailer, and the ICA Group, the largest Scandinavian food retailer, today announced that they have signed a heads of agreement whereby Ahold will acquire 50% of the shares in the ICA Group. The ICA Group is a prominent, privately-held, food retail company in Sweden and Norway, servicing 3,100 supermarkets, superstores and hypermarkets with annualized net sales of EUR 6.7 billion. The ICA Group was formed earlier this year through a merger between Sweden's ICA Handlarnas AB and Norway's Hakon Gruppen AS. The ICA Group also has a 50% stake in Statoil Retail, generating sales of EUR 2.5 billion through 1,500 Statoil gasoline stations in Denmark, Norway and Sweden. Sales of Statoil will not be consolidated in Ahold's accounts.

ICA financial background

The ICA Group's 1999 net sales are expected to amount to EUR 6.7 billion with EBIT estimated at EUR 154 million (2.3% of sales). This excludes income from Statoil Retail. The Group is privately held and therefore not listed on a stock exchange. ICA Forbundet, the association of Swedish ICA retailers, holds a 37.9 % stake. ICA retailers directly hold 32% of the shares. The Norwegian Hagen family, through its holding company Canica, holds a 26.5% stake.

New structure

Under the initial agreement, Ahold and the current main shareholders of ICA, ICA Forbundet and Canica, will each take a 50% share in a new entity to hold all current and future activities of the ICA Group in northern Europe. The transaction includes the ICA Group's operations in Sweden and Norway, its 50% stake in Statoil Retail, operations in Baltic countries and various other interests such as institutional food supply operations. Four members of the ICA Group have a seat on the Board of the new alliance. Roland Fahlin, currently Chairman and CEO of the ICA Group, will be Chairman and Stein Erik Hagen will be Co-Vice Chairman. Among the four representatives from Ahold, Jan Andreae, member of the Corporate Executive Board responsible for European activities, will act as Co-Vice Chairman of the new company's Board.

Ahold to pay EUR 1.8 billion for its 50% stake in ICA

Under the initial agreement to acquire 50% of the ICA Group, Ahold plans to pay a total of approximately EUR 1.8 billion. The transaction is subject to conditions including the full acceptance by ICA Forbundet, a due diligence review conducted by Ahold and approval by anti-trust authorities. An extraordinary shareholders meeting of the ICA Group to approve the transaction is scheduled for March.

The impact of the transaction on Ahold's earnings per share will be positive in the year 2000, growing gradually thereafter. Ahold will finance the transaction in line with past practice, which may include an equity offering. Ahold will announce details after the signing of the final contract, scheduled for the end of January 2000. The transaction is expected to close by mid-2000.

Earlier the ICA Group had contemplated a partial float of its shares to finance further growth and international expansion. However, retailers/shareholders of the Group and management clearly prefer teaming up with Ahold. It not only provides excellent financial compensation to current shareholders but also contributes state of the art retail expertise and full access to Ahold's European and worldwide network, vital to long-term continuity in today's rapidly-changing food retail environment.

Royal Ahold

Upon completion of the transaction, Ahold will generate worldwide annualized sales of approximately EUR 41 billion, of which about EUR 19 billion will be generated from its European operations. This will rank Ahold among the larger European food retailers in terms of sales. Joining forces with the ICA Group in Scandinavia is fully in line with Ahold's ambition to become the world's best and most successful supermarket company. The transaction supports Ahold's position as a global player and significantly strengthens its European position. Ahold currently employs 300,000 people worldwide.

ICA Group

The privately-held ICA Group was formed earlier this year through a merger between Sweden's ICA Handlarnas AB and Norway's Hakon Gruppen AS. The company is renowned for its seamless store network, entrepreneurial spirit, strong brand name and the quality of its customer services. Directly and indirectly (through its associated retailers), the ICA Group employs 35,000 people in Sweden and 12,000 people in Norway. The ICA Group and Ahold are members of AMS, a marketing alliance of prominent European food retailers.

In total the ICA Group services 4,600 stores, of which 3,100 are supermarkets, superstores, hypermarkets and discount stores, and 1,500 are convenience stores at Statoil gasoline stations. Last August, the ICA Group became 50% owner of a joint venture with Statoil, the foremost oil company in Norway and Scandinavia. Known as Statoil Retail Scandinavia, the joint venture's 1,500 gas stations are located in Sweden, Norway and Denmark. Sales currently amount to EUR 2.5 billion.

In Sweden, ICA has been market leader since 1970, with a market share of approximately 35%. All ICA retailers are members of the ICA Association (known as the ICA Forbundet). The retailers own the store they operate and work under a supply and marketing agreement with the ICA Group. The store portfolio consists of five formats, including 1,180 Nara neighborhood stores, 635 local Plus supermarkets, 155 large Kvantum supermarkets, 80 Rimi discount stores and 23 Maxi hypermarkets. Currently, the ICA Group's Swedish consumer sales amount to approximately EUR 6.4 billion.

In Norway, the Hakon stores of the ICA Group have a market share of 27.7%, making it second in terms of market share with consumer sales of approximately EUR 2.0 billion. The store portfolio consists of four formats, including 505 Rimi discount stores, 161 Sparmat neighborhood stores, 93 ICA supermarkets and seven ICA Maxi hypermarkets.

In addition, the ICA Group owns stores in two Baltic states -seven in Latvia and one in Estonia- and operates 11 stores through a joint venture in Lithuania.

Substantial benefits from synergy

The partnership between Ahold and the ICA Group is expected to generate synergy savings in 2001 of approximately EUR 35 million (0.5% of total 1999 ICA Group sales) on top of the synergies to be generated from the 1999 merger between ICA and Hakon. These synergies are expected to increase gradually thereafter and will be found in procurement, development of private label brands, store operations, logistics, distribution, IT, business development and the merchandising of non-food items. ICA retailers and consumers in Sweden and Norway are expected to benefit from the alliance through pricing initiatives, store upgrades and enhanced services to make the associated ICA Group stores even more competitive. The pricing initiatives in particular reflect increased volume and cost savings from best practice exchange and the sharing of experience, expertise and knowledge.

Remarks by Cees van der Hoeven, Ahold President and CEO

`Joining forces with the ICA Group considerably strengthens our European position. This is one of the most sizeable transactions in our company's history. The partnership is expected to have an immediate and sustained impact on net earnings and earnings per share. The excellent business case enables us to achieve the desired scaling up of our European stature with a known partner in a proven structure on a basis that is EPS enhancing. It strengthens our European base and positions us strategically for future steps. Our market leading positions help protect our profitability and optimize our growth prospects in a unifying Eurozone. And together with our partner's strong management team and successful operator entrepreneurs, we will develop the efficiencies and service enhancements that today's consumers demand. The exchange of European and global know-how, the pooling of expertise and the joint generation of new growth in northern Europe are now very much on the agenda. We are convinced of the fit between our cultures and welcome this Scandinavian thoroughbred into our stable. The venture is timely, right for all stakeholders and fully in line with our ambition to become the world's best and most successful supermarket company. We're very pleased.'

Remarks by Roland Fahlin, Chairman & CEO of the ICA Group

`In today's retail environment, teaming up with Ahold provides all ICA retailers and other stakeholders with a most positive outlook on future prosperity. The new partnership we are forging is better suited to cope with future developments, particularly as we will safeguard the entrepreneurial spirit and ownership that have made our companies so successful. Facilitating the decision was our conviction that Ahold is a highly professional food retailer whose mission, vision and strategic objectives are in line with ours. We speak the same retail language, believe in the same values and hold similar views on important cultural issues. The partnership we agreed upon encompasses both an excellent financial proposition as well as superior tools to improve our businesses, jointly grow, prosper and meet competitive challenges. It is by far the best direction for all involved to follow.'

Remarks by Jan Andreae, Ahold Board member responsible for European activities

`We know the ICA Group as a first-class organization. We admire the contributions of their store owners and how they have grown the business over the years. Entrepreneurial qualities and personal involvement with the business are instrumental to success, now and in the future. It is our joint objective to maintain and strengthen the local identity of the stores and their strong brand names. It is exciting to see how Ahold companies and alliance partners today benefit from regional and global sourcing activities that will soon be made available to Scandinavia. Altogether it makes us very successful. We can't wait to start.'

Remarks by Stein Erik Hagen, ICA Group Vice Chairman and Vice CEO

`This is the ideal way for the ICA Group and Hakon Gruppen to further prosper in Norway and Sweden as well as in other northern European countries. Once the transaction has been completed, we can accelerate growth at home as well as abroad. For members of the ICA retailers association, the partnership offers the opportunity to realize the value of their ICA Group holdings and continue to operate in their personal style. For the Hagen family, the partnership with Ahold stands for international quality, for utilizing scale and volume, and for working together across borders to the benefit of all stakeholders. The ICA Group gains unrestricted access to Ahold's knowledge network with best practice exchange and specialist consultation at practically all levels. Our Norwegian and Swedish suppliers can benefit from the new partnership. They are able to export their products and services outside Sweden and Norway by using the expansive Ahold network. These are exciting times for all of us.'

BACKGROUND INFORMATION

The ICA Group: prominent and popular in Sweden and Norway

The ICA Group was formed from the January 1999 merger between Swedish ICA Handlarnas AB (established in 1917) and the Norwegian Hakon Gruppen AS (1956). The ICA Group has net sales of EUR 6.7 billion. The ICA Group has a market share of 35% in Sweden and 28% in Norway and enjoys an excellent reputation in both countries. In total, the ICA Group services 4,600 stores, of which 3,100 are supermarkets, superstores, hypermarkets and discount stores. The other 1,500 outlets are convenience stores at gasoline stations which the ICA Group co-owns in a 50-50 joint venture established in August 1999 with Statoil. The ICA Group has developed a modern distribution system in Sweden and is rapidly upgrading logistics in Norway. The ICA Group has a successful customer loyalty card, an effective e-commerce initiative in place and provides home delivery service. -0-

The key store formats include:

Sweden
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Brand                No. of  Consumer Sales Sales Area  Store Format
                     Stores  (EUR `000)     (m2 )
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ICA Nara             1,180   1,168.0        100-400     Neighborhood
ICA Plus             635     3,036.9        400-1,500   Local Super-
                                                         market
ICA Kvantum/ICA      155     2,219.3        800-4,000   Large Super-
                                                         market
Supermarkets
MAXI ICA Stormarknad 23      700.8          4,500       Hypermarket
Rimi                 80      350.4          500-1,500   Discount
----------------------------------------------------------------------

Norway
----------------------------------------------------------------------
Brand         No. of    Consumer Sales    Sales Area    Store Format

              Stores    (EUR `000)        (m2)
----------------------------------------------------------------------
Rimi          505       1,213.9           300-1,500     Discount
ICA           93        499.2             1,000-2,500   Supermarket
ICA MAXI      7         147.5             3,000-6,500   Hypermarket
Sparmat       161       181.5             250-500       Neighborhood
                                                         Store
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Ahold and the ICA Group: a history of cooperation

     Both Ahold and the ICA Group are members of the Associated
Marketing Services (AMS), an alliance of prominent European food
retailers. In AMS, the ICA Group and Ahold's flagship Dutch
supermarket company Albert Heijn have been instrumental in the
development of the Euro Shopper private label line, which today enjoys
popularity among ICA, Hakon and Albert Heijn customers in Sweden,
Norway and The Netherlands. With some 300 Euro Shopper product items
on the shelves and further extension expected, it has become Europe's
private label market leader. The ICA Group and Ahold are also
prominent members of ECR Europe, the organization in which retailers
and suppliers team up, sharing knowledge, improving efficiencies and
streamlining European supply chains while cutting costs of
transportation, IT and marketing.
     Royal Ahold is a rapidly growing international food retailer with
leading supermarket companies in the United States, Europe, Latin
America and Asia. The company operates more than 4,000 supermarkets,
hypermarkets and specialty stores and had 1998 sales of $30.9 billion.
In the United States Ahold is the leading supermarket operator along
the eastern seaboard with more than 1,000 stores in five operating
companies: Stop & Shop, Giant-Landover, Giant-Carlisle, Tops and
BI-LO. Sales in the US totaled $16.2 billion in 1998. In March 1999
Ahold announced its intention to acquire Pathmark Stores, Inc. with
sales of $3.7 billion and 132 supermarkets in the New York
metropolitan area.
     Each week some 30 million consumers shop at Ahold stores or those
of joint venture partners. By building a network of first-class
regional supermarket chains with prominent positions in their local
markets, Ahold aims to reach its goal of becoming the world's best and
most successful food retailer.
     In addition to its listing on the New York Stock Exchange (NYSE:
AHO), Ahold's shares are trading on the Amsterdam Exchanges and on the
Swiss Exchange, and Ahold options are also traded on the American
Stock Exchange (AMEX). Ahold common shares may be accessed on the
Reuter Equities 2000 Service under the symbol AHLN.AS and on Quotron
under the symbol AHOLN.EU. Additional information is available on
Ahold's website: http://www.ahold.com.

Invitation to listen into the analyst conference call today, December
9, 1999: www.ahold.nl as of 5:00 p.m. (Dutch time)

Invitation to press conference, Friday December 10, 1999 at Royal
Ahold corporate headquarters at 10.00 a.m.
(Dutch time)

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Royal Ahold releases may contain `forward-looking' statements. Actual
results may differ from such statements as they may have been
influenced by factors beyond the company's ability to control.

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