AHOLD: Giant to acquire 16 Genuardi’s stores from Safeway

Yesterday afternoon Giant Carlisle, a division of Ahold (10,24 EUR, 0,34%) USA, announced it has entered into an agreement with Genuardi’s Family Markets, a subsidiary of Safeway Inc. to 16 stores for $ 106m to expand in the greater Philadelphia area. The outlets will be converted into Giant Food Stores after completion of the transaction, which is expected to take place in 1H12.

Conclusion:
We maintain our Accumulate rating and € 11.5 target price. The acquisition fits in the company’s strategy to grow the business in and around its current markets in the US and Europe and in new geographies where sustainable profitable growth can be achieved. Ahold is ready to pursue this growth thanks to its streamlined organisation and harmonized business processes.