By Maarten van Tartwijk
Dutch food retailer Koninklijke Ahold NV and Belgium's Delhaize
Group confirmed Tuesday they are in talks about a possible $25
billion merger that could create one of the largest supermarket
operators in the U.S.
Despite being based in Europe, both companies generate about 60%
of their sales in the U.S., primarily along the East Coast. Ahold
operates the Stop & Shop and Giant chains, as well as online
grocery store Peapod, while smaller rival Delhaize operates the
Food Lion and Hannaford banners.
No financial details of the potential deal were disclosed and
the companies cautioned that the talks may not result in any deal.
However, based on closing share prices Friday--before renewed
speculation about a deal surfaced--the merged company would be
valued at EUR22.91 billion ($25.79 billion.)
A tie-up between the two food retailers has been the subject of
speculation for years, with the companies reportedly holding
negotiations about a merger in 2006.
A combination would create one of the largest food retailers in
Europe and the U.S. with around EUR54 billion in annual sales.
Based on recent estimates by Morgan Stanley, a combination would
have a market share of around 4.2% in the U.S., making it the
country's fifth-largest food retailer.
Ian Walker contributed to this article.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
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