NETHERLANDS/US: Ahold sells US Foodservice
Dutch retailer Royal Ahold has sold its US Foodservice unit to two private equity firms, Clayton Dubilier & Rice and Kohlberg Kravis Roberts, for US$7.1bn.
The deal is expected to close in the second half of 2007.
Ahold's US Foodservice business posted sales of $19.2bn last year. Annual operating profit at the division was 1.7% of FY2006 sales.
The retailer bought the unit, the second-biggest US food distributor, for $3.6bn in 2000. Subsequently, US Foodservice became embroiled in an accounting scandal in 2003, when the company overstated its profits by $1.3bn.
In a bid to boost profitability following sustained pressure from investors, Ahold conducted a strategic review and put the business up for sale last November. Also put on the block were its US Tops retail chain, its operations in Poland and Slovakia and its holding in Portuguese supermarket Jeronimo Martins Retail.
CEO and president Anders Moberg, who resigned unexpectedly last week, said: "I am extremely pleased to be able to announce that we have reached this important milestone for US Foodservice, for Ahold and for our shareholders. We have focused on restructuring US Foodservice, strengthening its capabilities and restoring profitability. The agreement we have been able to reach with CD&R and KKR is the result of the hard work and dedication of everyone at US Foodservice."
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