Ahold crisis may herald break-up
Bidding opportunities for biggest players
February 25 2003
The financial crisis at Dutch supermarket giant Ahold may force the sell-off of many of its assets to rival players.
Tesco, Sainsbury’s, Wal-Mart and Carrefour are among the supermarket operators analysts believe would seek to benefit from a break-up of Ahold.
The Netherlands-based company is the world’s third biggest retailer, with more than 9,000 supermarkets worldwide. Yesterday’s announcement of a $500m black hole in the accounts of its US Foodservice division, as well as the prospect of further accounting problems in its South American business Disco Ahold, saw the group lose two thirds of its market value in a day as the share price tumbled.
Analysts think it may prove to be the final straw for a company already hit by severe cash flow problems. The collapse in its share price may attract a bidder for the whole group, or Ahold may have to sell assets piecemeal.
Wal-Mart and other US operators would almost certainly be interested in the US supermarkets, while the eastern European and Asian businesses would fit with the existing store operated by Tesco and Carrefour in those regions. The core Euopean supermarkets would also be an opportunity for expansion for most any of those operators, as well as others such as Sainsbury’s looking for expansion closer to home.
