Royal Ahold (NYSE: AHO), the international food provider, announced today that its Chilean joint venture operation Santa Isabel has agreed to acquire 100% of the shares of Supermercados Agas S.A. in Chile. A contract has been signed to this effect, conditional among others on due diligence and Board approval. Agas operates 17 large stores in Santiago, the Chilean capital, with 1999 sales of approximately Euro 100 million. They are located throughout greater Santiago and will be integrated into Santa Isabel.
Santa Isabel is the second-largest supermarket chain in Chile, currently operating 62 stores and 1999 sales of Euro 679 million. Santa Isabel also operates supermarkets in Peru and Paraguay. The total store count in the three countries is 94 and will increase to 111 following completion of the transaction with Agas.
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The planned acquisition considerably strengthens Santa Isabel’s presence in Santiago. Of the total Chilean population of over 12 million, approximately 50% lives in greater Santiago where Santa Isabel operates eight stores. The full-service Agas supermarkets contribute excellent locations and substantially strengthen Santa Isabel’s market position. Various synergies in distribution, logistics, IT, sourcing and store operations in addition to cost savings are expected to positively impact Santa Isabel’s results in 2001.
Ahold began operating in Chile in 1998 when it formed the Disco Ahold International Holdings joint venture with local partner Velox Retail Holdings. The joint venture comprises the highly popular Disco supermarket chain in Argentina, with 224 stores and 1999 sales of Euro 1.6 billion, and the Santa Isabel supermarkets in Chile, Peru and Paraguay. Elsewhere in Latin America, Ahold is almost 100% owner of Bompreco, its Brazilian food retail operation with 104 supermarkets and hypermarkets and 1999 sales of Euro 1.2 billion. In Central America, Ahold has a successful joint venture with La Fragua in Guatemala, El Salvador and Honduras, operating 121 stores and 1999 sales of Euro 530 million.
After completion of the acquisition in Chile, Ahold’s total annualized sales in Latin America will amount to more than Euro 3.6 billion.
Royal Ahold press releases may contain `forward-looking’ statements. Actual results may differ from such statements as they may have been influenced by factors beyond the company’s ability to control.
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