Royal Ahold (NYSE:AHO), the international food retailer, today announced it has received the green light from the European Commission (EC) in Brussels to finalize its 50-50 joint venture transaction with The ICA Group, Scandinavia’s leading food retailer with 3,100 stores and 1999 sales of Euro 6.7 billion.
The EC’s Competition Directorate notified Ahold that the proposed joint venture, ICA Ahold Holding AB, raises no serious doubts as to its compliance with common market principles. The EC also concluded that the Ahold-ICA transaction would not result in any overlaps in the parties’ activities at either national or any narrower level. For these reasons, the EC has decided not to oppose the transaction and to declare it compatible with its merger regulations.
“Now that we have the go-ahead from the European Commission following on a successful March 24 conclusion of the public offer for ICA shares, we expect to close the transaction, including payment, by April 28, 2000,” said an Ahold spokesman. “We anticipate any remaining conditions should be met over the next couple of weeks.”
Upon finalization of the transaction, Ahold will hold a 50% interest in ICA Ahold Holding AB, the joint venture into which the ICA Group’s activities have been brought. ICA Forbundet, the association of ICA retailers, and Canica, the investment company of the Norwegian Hagen family, hold the other 50% of ICA Ahold Holding AB.
Royal Ahold, the prominent international food provider, operates over 4,000 supermarkets, superstores, hypermarkets and other retail formats in the United States, Europe, Latin America and Asia. Worldwide 1999 sales amounted to Euro 33.6 billion and net earnings totaled 752.1 million. The company employs over 300,000 associates and serves more than 30 million customers a week. Ahold recently announced its intention to acquire U.S. Foodservice, a distributor of food and related items to over 140,000 institutional customers in the United States with annual sales of approximately USD 7 billion. In December 1999, Ahold announced its joint venture with the ICA Group, Scandinavia’s leading food retailer with sales of approximately Euro 6.7 billion. Following completion of both transactions, Ahold will generate annualized sales approaching Euro 50 billion.
In addition to its listing on the New York Stock Exchange (NYSE:AHO), Ahold’s shares are trading on the Amsterdam Exchanges and on the Swiss Exchange, and Ahold options are also traded on the American Stock Exchange (Amex). Ahold common shares may be accessed on the Reuter Equities 2000 Service under the symbol AHLN.AS and on Quotron under the symbol AHOLN.EU. Additional information is available on Ahold’s Web site: http://www.ahold.com.
This press release includes forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially, including risks associated with completion of a definitive agreement for the venture and related approvals, acceptance of the exchange model within the industry, unanticipated costs, competition from other providers, technological challenges and other factors.