Ahold and Delhaize, more than a year after they announced their intention to merge operations (in a deal that seems a lot more like an acquisition of Delhaize by Ahold), announced that in order to gain Federal Trade Commission (FTC) approval of the deal, they will divest a total of 86 stores.
The two companies now hope they can finalize their merger/acquisition by the end of the month.
Albertsons will buy a single Giant Food store in Maryland, while Big Y will buy eight Hannaford stores in eastern Massachusetts. Publix will buy 10 Martin's units in Richmond, Virginia; Supervalu will buy 22 Food Lion stores in Maryland, Pennsylvania, Virginia and West Virginia; and Tops Markets will acquire one Stop & Shop store in Massachusetts as well as 3 Stop & Shop stores and 2 Hannaford stores in New York; Weis Markets will buy 38 Food Lion stores in Delaware, Maryland and Virginia. Finally, Saubel’s Markets will buy a single Food Lion store in Pennsylvania.
Supervalu said that its 22 new stores will be converted to its Shop ‘N Save format and "at least initially be operated by Supervalu," which is in discussions with certain wholesale customers about how they might "have an interest in these stores going forward."
Ahold and Delhaize said that "all of the purchase agreements are subject to FTC approval. The agreements are also subject to FTC clearance and formal completion of the Ahold and Delhaize Group merger."
The divested stores represent about four percent of their combined fleets, and about 3.2 percent of their combined annual sales.
The two companies now hope they can finalize their merger/acquisition by the end of the month.
Albertsons will buy a single Giant Food store in Maryland, while Big Y will buy eight Hannaford stores in eastern Massachusetts. Publix will buy 10 Martin's units in Richmond, Virginia; Supervalu will buy 22 Food Lion stores in Maryland, Pennsylvania, Virginia and West Virginia; and Tops Markets will acquire one Stop & Shop store in Massachusetts as well as 3 Stop & Shop stores and 2 Hannaford stores in New York; Weis Markets will buy 38 Food Lion stores in Delaware, Maryland and Virginia. Finally, Saubel’s Markets will buy a single Food Lion store in Pennsylvania.
Supervalu said that its 22 new stores will be converted to its Shop ‘N Save format and "at least initially be operated by Supervalu," which is in discussions with certain wholesale customers about how they might "have an interest in these stores going forward."
Ahold and Delhaize said that "all of the purchase agreements are subject to FTC approval. The agreements are also subject to FTC clearance and formal completion of the Ahold and Delhaize Group merger."
The divested stores represent about four percent of their combined fleets, and about 3.2 percent of their combined annual sales.
- KC's View:
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This is an enormous opportunity for some of these companies,which ow can expand into markets where they might've had designs but not an obvious entry point.
The market that looks most interesting in terms of the competitive battle it sets up is Richmond, where Publix now will go head-to-head with Wegmans, which has one store there and another being built. That market also has Kroger, Aldi, Trader Joe's, and at some point, Lidl - and Publix will have to deal with all of them ... and the question will be whether its offering is differentiated enough to succeed.
The real battle, of course, will be Wegmans vs. Publix ... and that's a tough match to call. I tend to think that Wegmans has the advantage, but there's going to be blood on both sides, I suspect.
For me, the biggest question is how Ahold/Delhaize comes out of this. I cannot shake the feeling that this is just a financial and defensive play, and I am not yet persuaded that management has a vision for the kind of innovation and differentiation I think they need to achieve in order to survive in an increasingly competitive arena. I'm sure they'll find ways to be more efficient ... but will they find ways to be more effective?
That's the questions that remains to be answered.
