Consolidation among grocery store chains may quicken, and Delhaize Group has made it clear Royal Ahold NV is on the top of its shopping list. However, before the Belgian grocer would buy its Dutch rival, Ahold would have to complete the sale of its U.S. Foodservices Inc. catering division, Delhaize CFO Craig Owens told Reuters.
Ahold put the troubled unit on the block in November with an asking price of $5 billion, and received interest from a half dozen private equity firms. Rumors indicate that Clayton, Dubilier & Rice is the front runner, according to The Deal's Auction Block database.
Of course, a Delhaize-Ahold merger is an obvious combination because of their complementary U.S. chains. Ahold, which operates the Giant and Stop & Shop chains, has stores ranging from New Hampshire to Virginia. Meanwhile, Delhaize's U.S. chains, which operate primarily under the Food Lion brand, span from Maryland to Florida. However, Owens admits that there could be antitrust concerns especially in the Mid-Atlantic region, where the two overlap the most. In addition, there are other issues of concern that The Deal's Renee Cordes addressed in a story last year when the same combination was first rumored.
Of course, Delhaize's biggest obstacle could be convincing Ahold to sell. After all, the Dutch retailer insists it is not for sale.
Interest in grocery chain consolidation was reignited by two recent large deals: Whole Foods Markets Inc.'s $671 million purchase of Wild Oats and the Great Atlantic & Pacific Tea Co.'s $1.3 billion purchase of Pathmark Stores Inc. —Matthew Wurtzel
See story from Reuters
See U.S. Foodservices auction profile
See Supermarket Dealwatch
See related story from The Deal
Continue reading below
