Europe's two largest food retail groups merge for heating

The two major European retail "century-old stores" announced the merger on June 24, 2015, and the newly established Ahold-Delatce Group will become one of the world's largest chain retailers.

According to US media reports, the two companies that announced the strategic merger are the Dutch Ahold Group (Ahold) and the Belgian Delattre Group (Delhaize).

According to the merger agreement reached by the two parties, Ahold shareholders will obtain 61% of the equity of the new company. The merged new company will be named "Ahold-Delatse" with a market value of approximately 26.2 billion euros. After the merger, Dletts Chairman Mat Jensen will become the chairman of the new company, and Ahold CEO Dick Bohr will become the CEO of the new company.

After the merger of the two food retail groups, the new company will have more than 6500 chain stores and will serve more than 50 million customers every week. In terms of scale, Ahold and Delatse will become the sixth largest food retailer in the United States when combined. Ahold operates "Stop & Shop" and "Giant" brands in the United States, and Delattre owns "Hannaford" and "Food Lion" brands in the United States.

The merger requires a vote by shareholders of both companies and approval by relevant national regulatory authorities and is expected to be completed by mid -2016. The boards of both companies are calling for shareholders to vote in favor of the merger.

The two "century-old stores" of Ahold and Delatse stated in a joint statement that the one-time payment cost caused by the merger is about 0.35 billion euros, but starting from the third year after the merger, the new company is expected to save each year. Cost 0.5 billion euros. The two companies will share resources in advertising, marketing, warehousing and logistics to save money.

Meredith Adler, an investment analyst at Barclays Bank, pointed out that in the retail sector, more and more companies are not only focusing on market share, but many companies are trying to actively integrate resources, fully improve efficiency and form synergies through mergers and acquisitions. Another analysis pointed out that in the declining traditional retail market, large-scale life product retailers are also helpless to keep warm. Ahold and Delatse merged, mainly to counter competitors in the U.S. market "Safeway" and "Albertson's", the two also recently announced a merger, at the same time can work together to resist the impact of Wal-Mart supermarkets. Some analysts believe that the merger may be difficult to ease the impact of online retail on traditional industries. As of the close of trading on the 24th, Ahold's shares fell 1.3 per cent to 18.70 euros, while Delets' shares fell 5 per cent to 83.42 euros.

The Ahold Group was founded in 1887 by Albert Hain and his wife in Ostzane, the Netherlands, as a small grocery store. At present, Ahold is headquartered in Zaandam, the Netherlands. There are about 3200 chain life supermarkets in Europe and the United States, with sales reaching 32.8 billion euros in 2014. The company's brands include Albert Hayne, Etos and Albert. The Delaits brothers founded the Delaits Company in 1867. At present, Delattre operates about 3400 supermarkets in the United States, Europe and Asia, with sales of 21.4 billion billion euros in 2014.

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