Dutch retail giant Royal Ahold has confirmed it is engaged in exploratory talks regarding the possible sale of its stake in its Chilean supermarket activities that trade under the Santa Isabel banner.
Ahold said that although it must still agree on the terms of the final agreements with Chilean retailer Cencosud, the parties intend to negotiate on the basis that these activities have a total value, not considering any liability, of approximately US$150m. The related book value, including goodwill, of the Chilean assets is approximately US$220m. At year-end 2002, Santa Isabel operated 77 stores in Chile.
Cencosud has numerous retail interests including hypermarkets. Its wholly-owned subsidiary, Hipermercados Jumbo, is the third-largest food retailer in the country with seven hypermarkets and 15 DIY stores. The company also operates 11 hypermarkets and 21 DIY stores in Argentina.
Ahold said the possible divestment of its stake in its Chilean activities fits within its strategy to boost growth in its profitable core businesses, reduce debt and rationalise its portfolio. Consistently underperforming core assets, such as Ahold’s Chilean activities, are being scrutinised for potential divestment.