European supermarket chain Royal Ahold, better known as Ahold, and Delhaize Group have agreed upon a merger, creating one of the largest supermarket chains in the United States. The company has a combined value of $29 billion and will operate 6,500 stores around the country.
Despite being based in Europe, both companies generate about 60 percent of their sales in the United States, the Wall Street Journal reported. Ahold operates brands such as Stop & Shop and Giant, as well as online grocer Peapod. Delhaize owns Food Lion and Hannaford brands.
The combined board will be led by Mats Jansson, the current chairman of Delhaize, and Dick Boer, the current CEO and president at Ahold, will serve as CEO.
The new powerhouse will employ 375,000 workers and serve more than 50 million consumers a week in both the United States and Europe. Combined, the company will have about 4.2 percent of the country's grocery share, making it the fifth largest food retailer.
The deal comes during a time of change in the supermarket industry, especially in the United States. Since the recession, shoppers have not gone back to traditional grocery stores, but many are choosing to buy food online or at discount dollar stores, convenience stores and warehouses—eating away at market share. And on the other end of the spectrum, shoppers are also visiting more specialty grocers, such as Whole Foods (NASDAQ:WFM).
Chains such as Ahold and Delhaize are caught in the middle, trying to save money while still compete, and have reportedly been in talks since 2006. Last summer, it was rumored that Delhaize would bid on Market Basket when the supermarket chain looked for a buyer after an embittered family battle.
-See this Wall Street Journal article
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