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ZAANDAM, Netherlands — Ahold Delhaize, the supermarket operator to be created by the merger of Delhaize Group of Belgium and Netherlands-based Koninklijke Ahold N.V., would be the fourth-largest U.S. food retailer by revenue, behind Walmart, Kroger Co. and Albertsons-Safeway.
Ahold Delhaize, the supermarket operator to be created by the merger of Delhaize Group of Belgium and Netherlands-based Koninklijke Ahold N.V., would be the fourth-largest U.S. food retailer by revenue, behind Walmart, Kroger Co. and Albertsons-Safeway.
The tie-up also would give Ahold Delhaize greater buying clout. Executives with the retailers said they expect 500 million euros ($560 million) in annual cost savings from combining their supplier networks and advertising and promotions, as well as from leveraging scale in their in-house brands.
"This is a true merger of equals, combining two highly complementary businesses to create a world-leading food retailer," Ahold chairman Jan Hommen and Delhaize chairman Mats Jansson said in a joint statement last month. "The transaction delivers a compelling value proposition for our shareholders, a superior offering for our customers and attractive opportunities for our associates."
Dick Boer, chief executive officer at Ahold, will be CEO of Ahold Delhaize. Frans Muller, CEO of Delhaize Group, will become deputy CEO and chief integration officer. Ahold’s Jeff Carr will be chief financial officer.
The current chief operating officers of Ahold and Delhaize in the United States, James McCann and Kevin Holt, will stay on as COOs of their respective businesses. Jansson will become chairman of the combined company, and Hommen and Delhaize Group director Jacques de Vaucleroy will become vice chairmen. The company will be headquartered in the Netherlands and governed by a two-tier board comprising a supervisory board and a management board. The executive committee will oversee day-to-day management.
Both retailers record more than 60% of their sales in the United States, where Delhaize operates the Food Lion and Hannaford grocery chains and Ahold runs the Stop & Shop, Giant Food, Giant and Martin’s Food Market chains, as well as the Peapod online ordering and delivery service.
Ahold Delhaize would have 2,063 stores and sales of nearly $37 billion in the United States. The deal is expected to close in mid-2016.
The merger would establish a formidable supermarket competitor along the East Coast, where each is concentrated. Ahold USA, the U.S. arm of Ahold NV, 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.
Ahold had 3% of the U.S. grocery market in 2014, tied in the No. 4 spot with Publix Super Markets Inc., according to research firm Euromonitor International. Delhaize’s share was 1.6%. Combined, the companies would have $46 billion in annual U.S. sales.
Ahold operates 3,200 stores in Europe and the United States. Banners include Albert Heijn in the Netherlands, Belgium and Germany; Etos in the Netherlands; and Albert in the Czech Republic. Delhaize operates 3.400 stores in seven countries — Belgium, Greece, Luxembourg, Romania, Serbia, Indonesia and the United States. Nearly one-third of its stores are U.S.-based Food Lions.
The Food Lion chain has undergone several waves of change in recent years, including three shifts in the top executive position since 2012, the latest of which installed Meg Ham as president last November.
Ham is helping oversee a makeover designed to get Food Lion customers to spend more in the stores. Food Lion is updating stores and training its 63,000 employees in a more customer-centric way of doing business.
Ahold USA is in a similar situation. It, too, has been scrambling to stimulate sales and initiated a multipronged campaign to make its stores more attractive to shoppers.
