Dutch retailer Ahold and Belgian supermarket chain Delhaize have begun discussions at the highest level on a possible merger, Belgian newspapers reported on Saturday. The reports in financial newspapers De Tijd and L'Echo, quoting several unnamed sources, said the talks had just started and were in a preliminary phase.
Ahold spokesman Tim van der Zanden said: "We do not comment on market rumours." Delhaize spokesman Charles Davis also said the company did not comment on market rumours. Delhaize has for years been cited by analysts as a potential merger partner for Ahold and, according to L'Echo, the two companies held very advanced negotiations in 2006 and 2007. Ahold has a market capitalisation of 15.5 billion euros ($17.36 billion), double that of Delhaize with 7.53 billion euros.
Ahold reported slightly better-than-expected fourth-quarter net income of 219 million euros in February when it announced a dividend rise and new share buy-back programme. The company has the majority of its sales in the United States. Last month, Delhaize reported lower-than-expected operating profits of 173 million euros in the first quarter as it invested to regain customers in its struggling Belgian business. Delhaize has faced some tough quarters in Belgium because of heavy competition and industrial action.
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