Ahold acquisition strengthens position in Europe

By Leah Vyse

- Last updated on GMT

Related tags Germany Slovakia United states dollar Ahold Czech republic

Ahold's acquisition of 56 stores in the Czech Republic is part of
the company's plans to expand its position in central Europe
following its complete withdrawal from the Spanish and Asian

The Netherlands-based firm had originally hoped to acquire 67 stores from Austria-based firm Julius Meinl as part of its plans to concentrate on important markets.

Ahold, which is the world's fourth-largest retail group in terms of sales, has now increased its total number of stores in Europe to around 300 and in central Europe to about 520.

The firm is also looking to recover from a €1 billion debt caused by the discovery of widespread fraud in its US Foodservice business and currency devaluations in Latin America.

As a result, the company has initiated a 'Road to Recovery' plan based around restructuring its operations to strengthen its financial position through debt reduction.

For example, the company's investment in the Czech Republic follows the €140 million sale last month of Deli XL supplies to South-African-based Bidvest.

Ahold now plans to rebrand the Julius Meinl stores to Albert, the name under which the firm operates its supermarkets in the Czech Republic, Slovakia and Poland. This will increase the number of Albert supermarkets in the Czech Republic to approximately 250.

"We are delighted to be able to announce this transaction,"​ said the company's president and chief executive Anders Moberg. "We are nearing the successful completion of our divestment program and are now growing the business in key markets through selective acquisitions."

Royal Ahold's deal with Julius Meinl has been valued by analysts at between €20 to 40 million. The Dutch food retailer however has refused to comment.

In August Ahold reported consolidated second quarter net sales of €10.4bn, a decline of 0.9 per cent compared to same period last year. Ahold said the results were affected by the lower US dollar exchange rate against the euro.

Consolidated second quarter 2005 net sales, excluding the currency impact, grew by 0.6 per cent on a like-for-like basis.

In the Netherlands, sales rose 4.9 per cent to €1.5bn. Growth was driven by a 4.8 per cent growth at its supermarket chain Albert Heijn. The company reported that sales in central Europe rose two per cent to €412m. When the effects of currency are excluded, sales rose by four per cent on a like for like basis.

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