Royal Ahold expects FTC to OK Giant purchase soon 'Things are progressing but are not concluded'

Groceries

August 13, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Royal Ahold NV, the international food retailer that is buying Giant Food Inc. for $2.7 billion in cash, said yesterday that it expects Federal Trade Commission approval before the end of the summer.

"It's in the hands of the FTC; we feel good about it," said Hans Gobes, a spokesman for the Netherlands-based conglomerate.

FTC spokeswoman Victoria A. Streitfeld would say yesterday only that the FTC is continuing to investigate the proposed merger, which would make Royal Ahold the fifth-largest U.S. supermarket company and boost its sales to $35 billion from $26 billion last year.

"Things are progressing but are not concluded yet," said Ernie Smith, executive vice president of finance for Atlanta-based Ahold USA, the U.S. division of Royal Ahold. "We still expect [the acquisition] to be complete in the fall."

The FTC is expected to direct Ahold to divest five to 10 grocery stores in Maryland and Pennsylvania, Smith said. Because of antitrust regulations, the FTC would require that any targeted stores be sold to another supermarket chain rather than closed.

The FTC is reviewing areas where Landover-based Giant competes with Giant Food Stores Inc. of Carlisle, Pa., another chain owned by Ahold. Its goal is to prevent Ahold from dominating in an area. The Carlisle-based Giant chain operates Martin's Food Markets stores in Maryland.

Both of Giant Food's Frederick stores have been on a tentative list being reviewed by the FTC, Giant officials have said. Giant also competes directly with Martin's in Eldersburg, Westminster and Bel Air.

The potential sale of stores has touched off protests by consumers and United Food & Commercial Workers Local 27, the union representing 800 Giant workers at the five Maryland stores.

Those opposed to store closings say stiff competition from grocery retailers other than Ahold would prevent Ahold from gaining a monopoly in the targeted areas.

Royal Ahold, which owns four grocery chains on the East Coast, agreed to buy all of the voting shares of Giant from the 1224 Corp. holding company. By early August, Royal Ahold had secured about 81 percent of the outstanding shares and had extended the original $43.50-a-share offer to tomorrow.

Pub Date: 8/13/98

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