Ahold, Delhaize to Sell 86 U.S. Grocery Stores as They Near Merger Finish Line

Food retailers Royal Ahold (AHONY)  , of the Netherlands, and Belgian peer Delhaize (DEG) said they're on track to complete their merger by the end of this month as they announced agreements to sell 86 U.S. stores to seven buyers.

The assets are being sold in connection with the U.S. Federal Trade Commission's review of Ahold's agreed merger with Delhaize, and the sales are subject to Federal Trade Commission approval as well, the companies said late Wednesday.

Ahold and Delhaize announced plans to merge over a year ago into a company with more than 6,500 stores in Europe and the U.S.

The combination, for a total of €9.32 billion ($10.34 billion) in cash and shares, will put Ahold's U.S.-based Stop & Shop and Giant Food Stores under the same ownership as Delhaize's Food Lion and Hannaford brands. 

All 86 stores in the latest divestment package are in the eastern United States.

The lion's share - 38 Food Lion stores in Delaware, Maryland and Virginia - will be purchased by Weis Markets, of Pennsylvania.

As for the others, New Albertsons, part of Albertsons (ABS) , will pick up one Giant food store in Salisbury, Md. Big Y , of Massachusetts will get 8 Hannaford stores in eastern Mass.; Florida-based Publix Supermarkets (PUSH) will buy 10 Martin's stores in Richmond, Va.; Saubel's Markets,  of Pennsylvania will get one Food Lion in York, Pa.; Minnesota-based Supervalu will get 22 Food Lions in four states; and Tops Markets, of New York will get one Stop & Shop in Massachusetts, as well as three Stop & Shop and a pair of Hannaford stores in New York.

The buyers are all expected to convert the stores they're acquiring to their new banners. For the sellers, the stores represent 4.1% of their combined U.S. store count and 3.2% of their combined U.S. 2015 net sales.

The deal got the nod from both sets of shareholders in March, and from the Belgian Competition Authority, and now only needs FTC approval to reach the finish line.

Analyst Alan Vandenberghe of KBC Securities in Brussels, who had expected as many as 134 stores to be sold, said the lower number is a positive surprise but the main positive "is that this was a last hurdle blocking the merger between Ahold and Delhaize. From now it will take a few weeks to close the disposals.' 

The analyst reiterated his  buy rating on Delhaize shares and target price of €119.

Delhaize shares were up 1.4% in Brussels Thursday morning at €102.30, while Ahold was also 1.4% higher in Amsterdam at €21.60.

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