Ahold to buy two chains

September 4, 2001 Posted: 1650 GMT

AMSTERDAM, Netherlands (Reuters) -- Dutch supermarkets group Koninklijke Ahold NV said Tuesday it would buy U.S.-based Alliant Foodservice Inc. and Bruno's Supermarkets Inc. for a total of $2.7 billion including debt, and will issue up to 70 million new shares.

Ahold said it would pay $2.2 billion for Alliant Foodservice, including $750 million in assumed debt, and about $500 million for Bruno's Supermarkets and Bruno's Inc.

The Dutch firm said the deal will strengthen its presence in the United States, where it owns five supermarket chains and is active in foodservice through its U.S. Foodservice unit.

The Alliant purchase was widely anticipated by the market after details were leaked to the media last week.

The share issue, worth about 2.2 billion euros ($1.96 billion) based on Wednesday's closing price, would be marketed via accelerated bookbuilding starting Tuesday, Ahold said.

Both acquisitions are expected to be completed in the first quarter of 2002, pending regulatory approval, and be immediately accretive to earnings per share.

Deerfield, Ill.-based Alliant is a privately held company and is the third-largest U.S. food distributor behind Sysco Corp. (SYY: up $0.49 to $28.51, Research, Estimates) and Ahold's (AHO: down $1.83 to $28.45, Research, Estimates) U.S. Foodservice unit.

Alliant reported 2000 earnings before interest, tax, depreciation and amortization of $174 million on sales of $6.6 billion.

Ahold said it expected efficiencies and cost savings from the Alliant purchase of up to $70 million in the first year, increasing to $120 million in the third year. Birmingham, Ala.-based Bruno's posted 2000 earnings before interest, tax, depreciation and amortization of $60 million on sales of $1.65 billion.

Ahold said it expected efficiencies from the Bruno's buy to be $35 million in the first full year of combined operations, increasing to $50 million in the third year.

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