|
Ahold's US deal in doubt
|
 |
September 16, 1999: 6:21 a.m. ET
Report: Dutch group's $1.7B takeover hits regulatory hurdle
|
LONDON (CNNfn) - Ahold's $1.7 billion takeover of supermarket group Pathmark has hit a regulatory roadblock, according to a press report Thursday.
U.S. competition authorities are demanding the Dutch group dispose of up to half Pathmark's 136 stores, according to the Wall Street Journal. The newspaper reported such a divestment would completely derail the deal.
An Ahold spokesman told CNNfn.com the company had cooperated fully and been "very open" with the Federal Trade Commission. He maintained, "We're confident the deal will be finalized, hopefully in the fourth quarter."
Ahold has been buying U.S. supermarket chains for more than 20 years with the purchase of BI-LOW, based in the Carolinas, and the company's spokesman said, "We're very familiar with the U.S. regulatory procedure."
After its 1996 acquisition of Giant Food Stores, Ahold sold about 30 stores to comply with regulatory concerns. The 1998 deal to purchase Stop & Shop was followed by the sale of 10 stores. However, the Journal, citing sources close to the case, said the current competition review is likely to demand store sales on a far greater scale.
Ahold has become one of the largest supermarket retailers in the United States and one of the world's biggest food retailers, following a string of acquisitions. The majority of its U.S. stores, operated under brand names such as Giant, Stop & Shop, BI-LO, Tops and Finast, are along the eastern seaboard. Pathmark is based in New Jersey. U.S. sales make up more than half of Ahold's total sales.
The group was acquired in March in a deal valued at $1.7 billion, including $1.5 billion in assumed debt from Pathmark.
Ahold's shopping basket is unlikely to be filled once the Pathmark deal is done, and the company remains on the lookout for further deals in the United States. Its Albert Heijn chain in the Netherlands is the country's dominant retailer, making further expansion at home almost impossible.
Ahold stock dipped almost 1 percent to 33.40 euros in Amsterdam Thursday.
|
|
|
|
|
 |
|
