AHOLD AGREES TO DIVESTITURE OF 29 STORES

RUSSELL REDMAN

ZAANDAM, Netherlands -- Ahold here last week agreed to divest 29 stores in gaining federal and state consent to conclude its acquisition of Stop & Shop Cos., Quincy, Mass. The move stands to sharpen supermarket competition in New England, since Ahold agreed to deal the stores to rivals of Stop & Shop and its Edwards Super Food Stores chain. Stop & Shop and Edwards, based in Windsor Locks, Conn., together have 277 stores, concentrated primarily in New England.

Ahold said it expects to wrap up the Stop & Shop acquisition by July 31. The $2.9 billion deal, which would give Ahold a sixth U.S. supermarket chain, was announced March 28.

Under agreements with the Federal Trade Commission and the Connecticut, Rhode Island and Massachusetts attorneys general, Ahold has proposed to sell 26 Edwards stores, three Stop & Shops and two planned Edwards sites to the following companies:

Shaw's Supermarkets, East Bridgewater, Mass. -- 11 Edwards units and one Stop & Shop in Connecticut plus the two store sites (a former Grand Union supermarket in Connecticut and a former Rich's department store in Rhode Island). These locations would boost Shaw's store count in Connecticut from five to 18, giving the 101-store chain a key presence in that state in one deal.

Star Market Co., Cambridge, Mass. -- six Edwards stores in Rhode Island and one Stop & Shop in Massachusetts. The Rhode Island units would be the 42-store chain's first in that state.

Big Y Foods, Springfield, Mass. -- four Edwards stores in Connecticut and one in Massachusetts. Coupled with its current expansion program, the 37-unit chain reported that these stores would give it 18 stores in Connecticut and 26 in Massachusetts by the end of the year.

Bozzuto's, Cheshire, Conn. -- four Edwards stores and one Stop & Shop in Connecticut. The voluntary wholesaler currently operates eight corporate stores in Connecticut and one in Vermont.

Letters of intent for the sale of all locations have been signed, according to Ahold. No terms were disclosed, but Ahold reported that "the estimated proceeds of the sale of the stores will slightly exceed the book value and will not have a material effect on the results of the company."

The FTC consent agreement is subject to a 60-day public comment period, including comment on the proposed buyers. The FTC then will decide whether to complete the agreement. If approval is granted, the store divestitures would be required to be completed within 30 days.

"We are delighted that we now can conclude the acquisition of Stop & Shop before the end of the month," Robert Zwartendijk, president and chief executive officer of Ahold USA, Atlanta, said in a statement. "Though we will comply with the consent decree, we regret that the divestiture of Edwards or Stop & Shop stores may lead to dedicated associates from these stores leaving for other companies."

Last week, Ahold completed a global offering of 36 million common shares to raise about $1.8 billion ($33.50 per net share) to finance the deal, which includes the assumption of $1.1 billion of interest-bearing debt.