The merger in 2016 of retailers Ahold (from the Netherlands) and Delhaize (of Belgium) creates a major force in Europe's "low countries", but an even more dominant player in the US, where the combined business becomes the #3 traditional supermarket group. Ahold's Albert Heijn subsidiary is the leading supermarket operator in Holland, with over 35% market share, partnered by health & beauty chain Etos and liquor shop Gall & Gall. However more than 60% of Ahold's revenues already came from the US where the group owns the US supermarket chains Stop & Shop and Giant Foods, operating mostly in the Northeast and Mid-Atlantic regions, as well as online grocer Peapod.com. These are the main remaining operations of what was once a substantially larger group. Ahold was almost destroyed in 2003 by a financial scandal which began with a $880m fraud at its mammoth US foodservice division, and led to the discovery of accounting errors at several other subsidiaries as well. Only a complete overhaul and the sell-off of non-core or unprofitable businesses saved the group from total collapse. Ahold finally regained stability in 2007 having divested more than half of the subsidiaries it once owned. Delhaize, founded in Belgium in 1867, was equally prominent in its domestic market, but its cash cows were the two US chains Food Lion (in the Carolinas and Virginia) and Hannaford (in New England). It also has operations in Southeastern Europe and Indonesia. The combined business has more than 6,500 stores in 11 countries. There are just over 2,000 stores apiece in the US and the Netherlands, 765 in Belgium and another 1,600 in other European markets, such as the Czech Republic, Greece, Romania and Serbia. Super Indo is a joint venture in Indonesia. Proforma full year revenues for 2016 were E62bn. Ahold's Dick Boer is group CEO, with Frans Muller of Delhaize as deputy CEO and chief integration officer. Adbrands no longer profiles this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.
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Capsule checked 6th March 2017
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Adbrands Weekly Update 12th October 2017: M&A rumours should often be taken with a pinch of salt, but some are more exciting than others, so it's always worth hearing about them. One such is the report that US supermarket giant Kroger - the #2 in food retail after Walmart - is exploring the possibility of a merger with newly minted Benelux-based group Ahold Delhaize, which now ranks #5 in the US. Presumably, Kroger's main interest in its Ahold's local operations - Stop & Shop, Giant Foods, Food Lion and others - as a counter to further expansion by Walmart and German discounters Aldi and Lidl, as well as the new threat from Amazon's Whole Foods. The heritage business in the Netherlands and Belgium would no doubt be spun off. Kroger and Ahold responded to media inquiries with a no comment rather than a denial.
Adbrands Weekly Update 9th Mar 2017: Supermarket giant Ahold Delhaize appears to have got off to a good start following its summer 2016 merger. In addition to its dominance in Europe's Benelux region it is the #4 food retailer in the US. Combined proforma revenues for 2016 were E62bn, up around 2%, including almost E39bn ($43bn) from the US and E18bn from the Netherlands and Belgium. Strong 4Q performances from Ahold Netherlands and Delhaize's US banners Food Lion and Hannaford offset softer numbers from Delhaize Belgium and Ahold USA's Stop & Shop and Giant. Proforma net income was down slightly to E830m.
Adbrands Weekly Update 28th Jul 2016: The merger of supermarket retailers Royal Ahold of the Netherlands and Delhaize of Belgium was cleared by US regulators, allowing the combined group to begin trading at the start of this week. Though it is an undeniable force in Europe's Benelux region, Ahold Delhaize's real powerbase is the US, where it becomes the #4 food retailer behind Walmart, Kroger and Albertsons. Its regional chains include Giant, Food Lion, Martin's, Hannaford and Stop & Shop.
Adbrands Weekly Update 25th Jun 2015: Following several weeks of talks, Dutch retailer Ahold agreed to acquire Belgian rival Delhaize for around E9.32bn. Though the deal was agreed in Europe, it's really all about the US, where both companies already have a major presence. In addition to its enhanced European profile, the combined business, to be known as Ahold Delhaize, will control 2,000 stores across America, becoming the third largest traditional supermarket retailer behind Kroger and the merged Safeway-Albertsons, overtaking Publix.
Adbrands Weekly Update 14th May 2015: Continental European supermarket groups Royal Ahold of the Netherlands and Delhaize of Belgium are also in talks to merge. A combination of the two would create a major power in European retail, but perhaps more importantly would also become a very significant business in the US, where both companies have a large presence. Ahold already has local sales in excess of $21bn from chains such as Giant, Martin's and Stop & Shop. Delhaize, owner of Food Lion, Hannaford and Bottom Dollar, is not far behind with sales of almost $18bn. The two groups would have around 2,000 stores in the US, becoming the third largest traditional supermarket retailer behind Kroger and the merged Safeway-Albertsons, overtaking Publix. All, however, are dwarfed by Walmart, which has a commanding 25.8% share of the local groceries market, more than the next six retailers combined.
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