Netherlands-based Ahold and Belgium-based Delhaize have confirmed that they intend to merge, creating one of the largest food retailers in Europe and the United States.
The midmarket retailers say that the merger will require regulatory clearances, but do not expect any issues. They have targeted a merger completion date of mid-2016.
Ahold and Delhaize say that the combination of the businesses will create a retailer with more than 6,500 stores and generate aggregated net sales of EUR 54.1 billion (USD 60.7 billion) and an adjusted EBITDA of EUR 3.5 billion (USD 3.9 billion).
The merger is expected to generate annual savings of EUR 500 million (USD 560.9 million) to be realized in the third year after completion, the companies said.
Despite being European–based, the United States accounts for the largest share of sales for both Ahold and Delhaize and they believe the combined group will generate nearly 60 percent of its sales in the U.S. market, mainly along the East Coast.
Ahold operates the Stop & Shop and Giant chains, as well as online grocery store Peapod, while Delhaize owns Food Lion and Hannaford.
