Ahold, Belgian grocer Delhaize in merger talks

Ahold and Delhaize, one of the largest Belgian grocers, are discussing a merger, reports Belgian business daily De Tijd. The talks are still in their early stages, according to the newspaper. Neither of the two companies officially commented on the issue. After the merger, the renewed company would likely become the fifth largest supermarket chain in the world. Ahold is the larger of the two companies, with a market value of 15.4 billion euros. The value of Delhaize is 7.5 billion. The rumors of possible merger pushed the shares of Ahold up by over seven percent, before correcting itself and closing up 5.5 percent to 17.24 euros per share. Rabobank estimates the two companies could save around a billion euros of costs through the merger. "If rumors are true, there is a good chance it will become a deal," Rabobank analyst Patrick Roquas said. "We consider both CEOs as good retailers who are aware of threats in the sector and know how to respond." Ahold has about 30 stores in Belgium, while Delhaize owns a 22-percent market share in the country, There, Ahold pursues a different strategy than in the Netherlands by aiming at lower-income segments. In 2006, the two companies came close to merging. The deal was eventually called off, because Delhaize wanted to merge on equal terms, contrary to the intentions of a bigger Ahold. This time, there is no agreement on price and the post-merger structure yet in place, emphasized De Tijd. In America, Ahold and Delhaize together operate throughout most of the East Coast, from Maine to Georgia. Delhaize has around 1,300 stores in the States, mainly though its US subsidiary Food Lion. Albert Heijn has around 770 stores in the US located mainly in the northeast of the country. Delhaize also operates in Greece, Romania, Serbia and Indonesia; Ahold has stores in Portugal and Czech Republic.