Delhaize, Ahold in preliminary talks about blockbuster merger

Brussels, Belgium – Belgian grocery retailer Delhaize Group and Dutch grocery retailer Ahold N.V. have confirmed they are engaged in preliminary discussions about a possible merger that could create one of the largest supermarket operators in the U.S. But the two companies said the talks may not result in any deal.



While both retailers only acknowledged the merger talks in brief press releases, a deal would have enormous implications for the U.S. grocery market. The companies each do about 60% of their sales through U.S. supermarket chains that are predominantly based on the East Coast. Ahold operates U.S. grocery banners including Stop & Shop and Giant, as well as e-commerce grocery platform Peapod. Delhaize owns banners including Food Lion and Hannaford.



The companies have not disclosed any financial information, but a combined entity would be worth almost $26 billion. Reportedly, Delhaize and Ahold held similar discussions in 2006, but did not strike a deal.



By creating greater operating efficiencies and internal cost savings, a combined Delhaize-Ahold operation could more effectively compete with the discount and mass merchandise retailers, warehouse clubs, and lower-priced supermarket chains that are providing stiff competition to the two retailers in the U.S. grocery market.