Royal Ahold & Delhaize In Merger Talks
12 May 2015 --- Both Dutch supermarket retailer Royal Ahold and Belgian giant Delhaize Group have confirmed that they are in merger talks. If the merger goes ahead, the newly created chain would be Europe’s fourth largest supermarket retailer and one of the largest in the US.
Delhaize recently reported sales of $29.4bn, with a strong US presence (63% sales), while Royal Ahold reported $37bn sales in 2014. It also has a big share of the US retail market, with retailers Giant and Stop & Shop leading on the East Coast, which together account for around 60% of its overall sales.
The two retailers have been linked several times in the last eight years, as some see the pair as a natural fit. They do not encroach on eachother's retail space in Europe or the US, so their business is largely complimentary. Supermarket wars have been rife on both sides of the Atlantic as the discount retailers such Aldi and Lidl continue to push prices down, which only the large chains, particularly Walmart in the US, can compete with. This has left the mid-market chains such as Delhaize and Ahold in the middle of a market place where they don't fit with discounters or their higher end rivals such as Whole Foods Market. By combining certain aspects of their business, they may be in a better position to face current retail challenges.
Shares in both companies surged on confirmation of the news.
