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Belgian Competition Authority Clears Ahold, Delhaize Merger.


16 March 2016 - Dutch grocery store operator Ahold and Belgium-based Delhaize have received approval from the Belgian Competition Authority for their intended merger, the companies said.

The companies have agreed to merge in a EUR 26.07bn (USD 29.11bn) deal.

Shareholders of both firms have approved the deal.

Regulatory review of the proposed merger is still underway with the US Federal Trade Commission.

The BCA's approval is conditional upon the divestment of a limited number of stores in Belgium to address competition concerns raised by the regulator.

These divestments will include 13 existing stores in total, and consist of 8 Albert Heijn stores and 5 Delhaize franchised stores.

A limited number of future Ahold and Delhaize projects will also need to be divested. The divestment package does not include any integrated stores of Delhaize.

No stores will be closed as a result of these remedies. The current labor and working conditions of the associates will be respected according to Belgian labor regulations.

The stores involved will have to be transferred to a buyer with the financial means and proven expertise to maintain them as viable and active competitors for Ahold Delhaize and other companies.

Until all requirements imposed by the BCA are met, Albert Heijn and Delhaize stores in Belgium will continue to operate separately.

On 24 June 2015, Ahold and Delhaize announced their intention to merge, creating an international retailer with more than 6,500 stores.

Under the deal, Ahold will buy Delhaize for around EUR 9.8bn (USD 10.9bn).

The merger will create a base of more than 6,500 stores with 375,000 associates. The combined company - to be called Ahold Delhaize -- will be able to serve over 50 million customers per week in the United States and in Europe.

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, CEO of Netherlands-based Royal Ahold, will become chief executive officer of Ahold Delhaize. Frans Muller, CEO of Belgium-based Delhaize Group, will become deputy CEO and chief integration officer of Ahold Delhaize.

The companies anticipated run-rate synergies of EUR 500m per year to be fully realised in the third year after completion.

Ahold and Delhaize businesses reported aggregated net sales of EUR 54.1bn, adjusted EBITDA of EUR 3.5bn, net income from continued operations of EUR 1.0bn and free cash flow of EUR 1.8bn in 2014

The combined company will generate around 60% of its revenue in the US.

Country: Belgium

Sector: Food/Beverages/Tobacco

Target: Delhaize

Buyer: Ahold


Deal size in USD: 29.11bn

Type: Merger

Financing: Stock

Status: Agreed

Buyer advisor: , ,

Comment: Belgian Competition Authority clears deal

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Publication:M & A Navigator
Geographic Code:4EUBL
Date:Mar 16, 2016
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