UPDATE: Ahold and Delhaize verified the early merger discussions, reports Eurofruit.
Dive Brief:
- Royal Ahold NV and Delhaize Group are rumored to be in talks about a potential merger, according to two Belgian newspapers, De Tijd and L'Echo.
- Reports said Ahold and Delhaize once had advanced negotiations in 2006 and 2007.
- Neither company has officially confirmed that the discussions are taking place.
Dive Insight:
Reuters reported that in Q4, Ahold produced higher-than-expected net income, while Delhaize missed analysts' estimates for operating profits. Rabobank analyst Patrick Roquas says he sees no immediate need for the merger but that it there is "a strong rationale" as well, according to Supermarket News.
The benefits of the merger might include, "more size and skills to improve the position and differentiation of the two operations in the U.S.; benefits to Delhaize from the skills of Ahold’s Albert Heijn operation; an accelerated rollout of online business; and benefits from combining the two businesses in southeastern Europe," Supermarket News reported. However, Ahold and Delhaize have been in these types of talks before, so if the rumors are true, it's not clear whether this time will really be the time the merger actually goes through.
Upon the report, Delhaize's stock soared up to 19%, the company's largest gain since August 2003. Ahold also saw a jump in stock price up to 10%.