The combined company will be named Ahold Delhaize.
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Delhaize shares were suspended in Brussels Tuesday, after gaining 8.4 percent, valuing the company at 9.11 billion euros.
Koninklijke Ahold NV traded 1.2% higher at €19.19 per share in Amsterdam, marking a year-over-year increase of 40.34%. “With extraordinary reach, diver’s products and formats, and great people, we are bringing together two world class organizations to deliver even more for the communities we serve”.
The merged firm will generate about €54 billion in annual sales, with more than 6 500 stores and a global workforce of 375 000 employees serving over 50 million customers per week on both sides of the Atlantic.
Under the deal, Delhaize shareholders will receive 4.75 Ahold ordinary shares for each Delhaize ordinary share.
“On initial inspection the deal looks good for Ahold shareholders, they are getting 1 billion euros in cash and paying only a 27 percent premium for Delhaize, well below some of the initial estimates”, said Bruno Monteyne, an analyst at Sanford C. Bernstein in London.
The merger, which will lead to the formation of a single company called Ahold Delhaize with more than 6,500 stores, is expected to be completed in mid-2016, subject to regulators’ and shareholder approval, the companies said Wednesday in a joint press release. The combination would be the biggest for the food retail industry in nearly a decade.
Rumors of preliminary merger talks between the Dutch and Belgian companies appeared in local media on Saturday, May 9. Fewer than 5 percent of the combined company’s USA stores can genuinely be described as overlapping, Barclay’s analysts said in a May 13 note. “Shareholders may have been disadvantaged by this late disclosure, for instance those who sold their Ahold shares on Monday”, VEB spokesman Eroll Keyner said.
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