Hurdle cleared in sale of Giant Royal Ahold finds buyers for 10 sites

FTC gives early OK

September 18, 1998|By Kristine Henry | Kristine Henry,SUN STAFF

Royal Ahold NV said yesterday that it had cleared a major regulatory hurdle in its quest to complete its $2.7 billion acquisition of Maryland-based Giant Food Inc. and expects to wrap up the deal in several weeks.

The Federal Trade Commission, fearing market dominance, had ordered the two companies to sell 10 locations where Giant stores overlapped with those of another Ahold property -- Giant Food Stores Inc. of Carlisle, Pa. After weeks of looking for takers, Royal Ahold said yesterday that it had found buyers and gotten preliminary approval from the FTC.

"It is hard to find buyers that meet the approval process of the FTC," said Hans Gobes, a spokesman for Netherlands-based Royal Ahold. "The FTC wants buyers who can give us competition in the local market, and that's not so easy to find."

Giant, based in Landover, will sell five of its Philadelphia-area Super G stores to Supervalu Inc., and its Eldersburg Giant store to Safeway Inc.

Ahold subsidiary Giant Food Stores of Carlisle will sell four of its Maryland stores, which operate under the name Martin's Food Markets.

Gobes said FTC staff members told the companies that formal approval of the sales should come within the next several weeks.

"Immediately after that, we'll finalize the acquisition and pay the shareholders of Giant Food and immediately become the owners," he said.

FTC spokeswoman Victoria Streitfeld said she could not comment on the approval process other than to say the commission is reviewing the merger.

Royal Ahold will pay $43.50 per share on 60 million shares. The sale will make Royal Ahold the fifth-largest U.S. supermarket company and boost its sales to $35 billion from $26 billion last year.

The union that represents Giant workers gave the deal a thumbs up.

The United Food and Commercial Workers Local 27, which represents about 6,300 Giant workers, had worried that Royal Ahold would divest itself of union-represented stores instead of the non- unionized Martin's stores.

Buddy Mays, president of the local, said yesterday that he is "ecstatic" that only one Giant in his jurisdiction -- the one in Eldersburg -- is being sold. The Philadelphia stores are under the purview of a different local.

"We didn't hit a grand slam, but we did hit a three-run home run," he said.

Mays' local also represents Safeway workers, and he and the Eldersburg store's management have discussed how best to handle the transition at the Carroll County store.

Tony Rivellino, co-owner of Country Market stores, which will take over two Martin's stores in Frederick, said he plans to meet with Martin's employees soon.

"I know there's a lot of anxiety," he said. "But we're going to offer all the employees positions with us. There will be no cuts in pay or benefits or seniority."

Also being sold are Martin's stores in Bel Air, to Fleming Co. Inc., and Westminster, to Richfood Holdings Inc.

Pub Date: 9/18/98

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