European supermarket giants Ahold and Delhaize have confirmed that they have begun preliminary talks regarding possible merger. The story was first reported May 12 by two Dutch newspapers.
This is not the first time that speculation has been strong that the two European retailers, which do about 60 percent of their business in the U.S., have discussed joining forces.
Ahold, based in Zaandam, the Netherlands, and Delhaize, headquartered in Brussels, Belgium, reportedly also had discussions about a joint agreement in 2006, but could not agree on valuation of a deal.
Several European analysts told said that that a strong case could be made for a merger, citing creating better value for shareholders, a strengthening of each retailer’s online business and a repositioning of its business in the U.S., although two of the analysts we spoke with noted that they would question the future of Food Lion long-term presence in the U.S.
The preliminary discussion reports certainly produced a strong surge in share price. Delhaize rose as much as 19 percent to 86.08 euros per share ($96.05), the biggest gain in almost a dozen years, while Ahold advanced about 10 percent to 18.97 euros per share ($21.16), the most since 2008. That boosted the companies’ respective market values to 8.9 billion euros ($9.8 billion) and 17 billion euros ($18.97 billion).
If a union between the two largest merchants in Holland and Belgium were to occur, 2014 sales would have been a combined $60.5 billion, with about $37 billion in the U.S. under the Giant/Landover, Giant/Carlisle, Stop & Shop,
On May12, two Dutch newspapers reported that international food retailers Ahold (based in Amsterdam) and the Delhaize Group (based in Brussels) had begun preliminary talks regarding possible merger.
This is not the first time that speculation has been strong that the two European retailers, which do about 60 percent of their business in the U.S., have discussed joining forces. Ahold and Delhaize reportedly also had discussion about a joint agreement in 2006, but could not agree on valuation of a deal.
Several European analysts told said that that a strong case could be made for a merger, citing creating better value for shareholders, a strengthening of each retailer’s online business and a repositioning of its business in the U.S., although two of the analysts we spoke with noted that they would question the future of Food Lion long-term presence in the U.S.
The preliminary discussion reports certainly produced a strong surge in share price. Delhaize rose as much as 19 percent to 86.08 euros per share ($96.05), the biggest gain in almost a dozen years, while Ahold advanced about 10 percent to 18.97 euros per share ($21.16), the most since 2008. That boosted the companies’ respective market values to 8.9 billion euros ($9.8 billion) and 17 billion euros ($18.97 billion).
If a union between the two largest merchants in Holland and Belgium were to occur, 2014 sales would have been a combined $60.5 billion, with about $37 billion in the U.S. under the Giant/Landover, Giant/Carlisle, Stop & Shop, Food Lion and Hannaford banners.
U.S. business alone would be more than $44 billion combined (approximately $27 billion from Ahold’s 766 stores and $17.5 billion from Delhaize America’s nearly 1,300 units).
According to other trade reports, if Ahold were to make an offer for Delhaize, it would be the biggest purchase in Ahold’s history. The Belgian grocer’s market value is more than twice the $3.4 billion Ahold paid for U.S. Foodservice in 2000 at the business.
While we’ll wait to see what develops over the next few months, there was real news made by Ahold USA earlier this month when the Carlisle, PA-based retailer continued its restructuring process, which it said is designed to simplify operations, speed up decision-making and support stores more effectively.
“With a clear and constant focus on serving the evolving needs of customers and stores, we are making significant, rapid progress in turning Ahold USA into an even faster, stronger and more responsive organization,” said James McCann, chief operating officer of Ahold USA. “While there are still important decisions to make over the next few weeks, we now have a new organizational framework in place – ahead of schedule – that reduces management layers, increases the number of direct reports for many managers and brings important decisions closer to the stores that serve local shoppers each day.”
Nick Bertram (currently senior VP-store strategy and execution) has been named to the role of senior VP-merchandising strategy and support. This is a new function that will help simplify the organization and improve the company’s ability to serve customers by providing core merchandising teams with comprehensive support on product assortment, pricing and promotions. Dean Wilkinson (currently VP-sales and marketing for Giant/Landover) will replace Bertram as senior VP-store strategy and execution.
Marissa Nelson (currently senior VP-merchandising services and support) has been appointed to lead an expanded focus on healthy living across Ahold USA’s companies as senior VP-responsible retailing and healthy living, an expansion of Ahold USA’s current “responsible retailing” function.
Steve Rowell (currently senior VP-deputy general counsel) has been named senior VP-deputy general counsel and communications to take on additional responsibilities overseeing external communications, including media relations, government relations and community affairs.
The company’s new organizational structure is expected to go into effect on June 22.
Effective immediately as previously announced, Mark McGowan has moved into his roles as executive VP-operations for Ahold USA and president of the Stop & Shop New England division. This change was originally announced in March. He previously served as president of the Shop New England division before taking on new responsibilities at Ahold USA in 2012. Until a permanent executive VP of merchandising is appointed (that search has been ongoing for approximately 10 months), the senior VPs of merchandising will report to McCann for an interim period.
Don Sussman, who stepped in to lead the New England division on an interim basis, will now return full time to his role as president of the Stop & Shop New York Metro division.
As a result of the Ahold USA changes, the company’s retail divisions also made several personnel announcements. At Giant/Landover, Mark Adamcik, currently regional VP-operations, has been appointed VP-sales and merchandising, effective May 18, succeeding Wilkinson.
The Landover division also announced several additional management changes, all of which are effective on May 18.
Toni Judy is moving from regional VP-operations for region 10 to regional VP-operations for region 9. Judy joined Giant in 2012 as a district director and became regional VP for region 10 in June 2013. She has more than 30 years of experience in the food retail industry, including management roles with Winn-Dixie and Sam’s Club.
Robert Belcher has been appointed the new regional VP for region 10. He most recently served as the director of sales and merchandising for center store. Belcher, who has worked in retail management for more than 30 years, started with Giant in 2011 as district director. Prior to joining Giant/Landover, he held a senior operations position at Wal-Mart.
Commenting on these announcements, Gordon Reid, president of Giant/Landover, said, “Mark, Dean, Toni and Robert are exceptional leaders, and I want to wish them all the best in their new positions.”
At Giant/Carlisle, it has been announced that John Ponnett is returning to the division as senior VP-operations. Most recently, Ponnett served as VP-asset protection at Ahold USA. He succeeds Larry Stover, who in March announced his retirement after 47 years of service to Giant/Carlisle and its customers. Ponnett will transition into his new role and work side-by-side with Stover until Stover’s retirement in July.
Ponnett has worked with Ahold USA businesses for more than 27 years, including as regional VP-operations, director of fresh sales and marketing and district director for Giant/Carlisle. He was also a store manager in several Carlisle division stores in central Pennsylvania.
Also, Stacy Wiggins, the division’s regional VP-operations, will be moving from Carlisle to the Stop & Shop New England division as senior VP-operations. A search currently is under way for her replacement.
“We are extremely grateful for Larry’s extraordinary contributions to Giant/Martin’s and, in John, are glad to have a tremendous leader to carry this work forward,” said Tom Lenkevich, president of Giant/Carlisle. “We also appreciate Stacy’s great achievements for our division, and wish her all the best in her new role with Stop & Shop New England.”
Wiggins will replace Russ Greenlaw, senior VP-operations, who will be leaving the New England division to take on a new special projects role for Ahold USA, starting June 1. Along with her work with Giant/Carlisle, Wiggins has also worked for Giant/Landover, Stop & Shop New York Metro and Wal-Mart.
In addition, Vinod Israni is being promoted to the role of regional VP for region 1. Israni has been with Stop & Shop New England since 2000, serving as district director, service manager and store manager.
Commenting on the division’s recent personnel announcements, McGowan said, “Russ, Stacy, and Vinod are strong leaders for our division, and I want to wish them all the best in their new positions.”
This restructuring announcement is the largest since James McCann succeeded the retiring Carl Schlicker as chief operating officer of Ahold USA in February 2013. Two months ago, the Carlisle, PA-based retailer announced a reduction in staff affecting approximately 120 associates at its support offices in Carlisle and Quincy, MA.
