Royal Ahold (NYSE:AHO), the international food provider, yesterday announced that the acquisition of PYA/Monarch by U.S. Foodservice, Royal Ahold’s wholly-owned foodservice company in the United States, has been approved by the Federal Trade Commission (FTC). The transaction increases Ahold’s foodservice sales in the U.S. to approximately USD 12 billion and boosts overall projected Ahold sales in the U.S. to close to USD 35 billion in 2001. Completion of the acquisition is expected in the first week of December.
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Once the transaction is finalized, PYA/Monarch (sales of USD 3 billion) will team-up with U.S. Foodservice (sales of USD 8 billion) and considerably strengthen Ahold’s position in the out-of-home food consumption market. U.S. Foodservice and PYA/Monarch were sister companies in the late ’90s and specialize in supplying quality food to institutions across America including restaurants, sports stadiums, hospitals and schools. PYA/Monarch is currently owned by Sara Lee and operates successfully in the southeastern United States. U.S. Foodservice operates nationwide, focusing on the northeast.
Impressive synergies among Ahold food retail and foodservice activities
Ahold is a leading food provider in the United States and elsewhere in the world. Over 60% of its worldwide sales are currently generated in the United States. Its five successful U.S. supermarket operations – Stop & Shop in New England; Giant Food in Maryland, Virginia and Washington D.C.; Giant Food Stores in Pennsylvania, New York and New Jersey; Tops Markets in western New York State and Ohio; and BI-LO in the Carolinas, Georgia and Tennessee – generate sales of over USD 20 billion. Ahold has also developed a very strong presence this year in the rapidly growing foodservice sector. Impressive cost-effective synergies are being generated among Ahold’s food retail and foodservice channels.
U.S. Foodservice
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By GlobalDataU.S. Foodservice is the second-largest food distributor in the United States. Following the completion of its acquisition of PYA/Monarch, the Ahold subsidiary will generate annualized sales of approximately USD 12 billion through 40 marketing and distribution centers nationwide. The company markets and distributes a wide range of national and private label items to over 130,000 foodservice customers, including restaurants, hotels, healthcare facilities, cafeterias and schools. U.S. Foodservice was acquired by Ahold in April 2000.
Royal Ahold
Royal Ahold operates approximately 8,000 supermarkets, hypermarkets and other store formats in the United States, Europe, Latin America and Asia with annualized sales approaching Euro 50 billion. The company is also developing a significant presence in the foodservice sector and has become an important e-commerce player through its majority stake in Peapod, the number one e-grocer in the United States. Ahold employs almost 400,000 associates and serves the food needs of over 30 million loyal customers in 24 countries every week. Ahold’s website can be found at www.ahold.com.
Royal Ahold press releases may contain `forward-looking’ statements. Actual results may differ from such statements as they may have been influenced by factors beyond the company’s ability to control.
