Ahold Delhaize Updates on Store Divestments and Belgium Strategy

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KEY POINTS

  • The Belgian Competition Authority (BCA) approved the merger of Ahold and Delhaize Group on March 15, 2016. The approval was conditional upon the divestment of a number of stores and projects, in Belgium, to address competition concerns.
  • Ahold Delhaize announced on March 13, 2017, the first set of sale agreements for the Belgian operations, which included the divestment of five stores and one project.
  • The second set of sale agreements was announced on March 23, 2017, and included the divestment of four stores and one project, in Belgium.
  • The firm’s key priority over the next few years is to make the Delhaize Le Lion banner “the favorite supermarket of the Belgians,” and will invest in strengthening its offer and customer experience.

The BCA approved the merger of Dutch grocer Ahold and Belgian supermarket group Delhaize on March 15, 2016, and the combined entity began operations as Ahold Delhaize on July 24, 2016.

In order to address competition concerns, the regulator attached the following conditions to the approval: that Ahold Delhaize divest eight Albert Heijn stores, five Delhaize-affiliated stores and a limited number of projects that are in development, in Belgium.

Ahold Delhaize announced the first set of sale agreements on March 13, 2017, which included the divestment of five stores and one pipeline project. The company announced the second set of sale agreements on March 23, 2017, which included the divestment of four stores and one project.

These are summarized in the table below:

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Belgium Strategy

Along with the store divestment announcement on March 23, 2017, Ahold Delhaize provided an update on its strategy for Belgium. The firm will invest in strengthening Delhaize Le Lion’s offer and customer experience, as its key priority over the next few years is to make the banner “the favorite supermarket of the Belgians.”

The company also plans to bring the Ahold Delhaize Belgium supermarkets under the Delhaize Le Lion banner, once it completes the improvements.

  • Our coverage of Ahold Delhaize’s FY16 results can be found at bit.ly/ADFY16
  • Our report on the company’s strategy discussed at its Capital Markets Day 2016 can be found here: bit.ly/ADStrategy