Delhaize’s Revamped Board Makes Ahold Deal More Likely Than Ever

A combination of European food retailers Royal Ahold NV and Delhaize Group, in the cards for almost a decade, is more likely now after Delhaize brought in new management and overhauled its board to loosen the Belgian company’s ties to its founding family.

Delhaize in 2013 hired Frans Muller as chief executive, replacing Pierre-Olivier Beckers-Vieujant, a descendant of co-founder Jules Vieujant. Now, Beckers-Vieujant is about to step down from the board after 20 years, leaving only one director with ties to the family that founded the company in 1867. Members of the family still own about 20 percent of the shares, although they don’t act in concert, Natixis SA said in a note.

The board is more international than in 2007, the last time merger speculation cropped up, with fewer Belgians and more Americans, reflecting the company’s increased U.S. presence. It also includes executives from multinational companies such as Unilever and Adecco SA. Muller, the first CEO from outside the family, is from the Netherlands, Ahold’s home country.

“I think that management teams are different now,” Patrick Roquas, an analyst for Rabobank Nederland, said by phone. “Delhaize’s current board has a different approach than management in 2007.”

Talks between the companies are at a preliminary stage, Belgian newspapers De Tijd and L’Echo reported May 9, citing several people they didn’t name. The retailers haven’t started discussing price or structure, according to the reports.

Ahold, which owns the Stop & Shop chain in the U.S., and Delhaize, the owner of Food Lion stores, both declined to comment on the reports. Delhaize didn’t immediately return a call seeking comment on the family’s ownership and changes to the board and management.

Sticking Point

The presence of Muller and CFO Pierre Bouchut, a Frenchman previously with Carrefour SA, makes management’s compatibility with Zaandam, Netherlands-based Ahold less of a sticking point than it might have been in the past, said James Anstead, an analyst at Barclays Plc. Other hurdles to a deal, like laggard assets and the companies’ relative market valuations, are also “less worrisome” today, he said.

Delhaize has a market value of about 8.5 billion euros ($9.5 billion) while Ahold is valued at about 16.2 billion euros.

The lone Delhaize director with ties to the founding family is Jacques de Vaucleroy, who runs Northern and Central European operations for French insurer Axa SA. De Vaucleroy is a descendant of Claire Vieujant, daughter of Celine Delhaize and Jules Vieujant, who helped found Delhaize, according to genealogical website Geneanet.

The companies are a “natural fit,” according to Barclays, as they’re both based in the Benelux region and dominated by their U.S. divisions. The U.S. would account for about two-thirds of their combined sales.

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