All eyes are on Royal Ahold today (6 November) as the Dutch retailer prepares to reveal the findings of its long-awaited business review, which may include the sale of underperforming units and cost-cutting measures.


Ahold has come under significant pressure to sell US operations and focus on its European businesses from hedge funds Paulson & Co and Centaurus Capital, who jointly own a 6.4% stake in the company.


The world’s fourth biggest retailer has refused to meet with the investors until after the completion of the review, the findings of which will be announced this morning.


Boosted by asset disposal talks and rumours of a possible merger with Belgian supermarket group Delhaize, Ahold shares have increased by 32% since the start of the year.
Industry commentators have suggested that the sale of assets, particularly the company’s non-core US foodservice business, coupled with a share buy-back scheme could help Ahold to regain an investment-grade credit rating and pave the way for the return of dividends for shareholders.


The US foodservice unit posted sales of EUR14.87bn (US$19bn) in 2005, the equivalent of one third of the group’s revenues. However, it has few synergies with Ahold’s core food retail business. 

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Ahold’s 2005 US retail sales totalled EUR18.15bn, or 41% of the company’s total revenue. However, margins in the US have come under pressure due to the competitive nature of the market. Ahold’s flagship Albert Heijn retail business in the Netherlands is one of the company’s most profitable supermarket units. Meanwhile, loss-making businesses in Poland, the Czech Republic and Slovakia are considered ripe for disposal by many commentators.