Ahold Delhaize's acquisition of Profi provides a strong format fit and a complementary customer proposition to its Mega Image in the Romanian market.
Zaandam, Netherlands-based Ahold Delhaize has agreed to acquire 100% of Romanian grocery retailer Profi Rom Food SRL from MidEuropa for an enterprise value of approximately €1.3 billion (almost USD $1.4 billion). According to Ahold Delhaize, the acquisition provides a strong format fit and a complementary customer proposition to Ahold Delhaize’s local brand Mega Image in the Romanian market.
Timișoara-based Profi was founded in 2000 as a traditional grocery retailer in Romania. It currently has the country's largest store network, operating 1,654 stores under four banners across convenience and supermarket formats: Super, Loco, City and Go. The company’s procurement capabilities and infrastructure support an enhanced product assortment that caters to local tastes. In 2020, Profi launched the Monaco concept to advance the convenience food shopping experience with the inclusion of ultra-fresh groceries and quick in-store meals and coffee service. For the 12 months ending June 2023, the company generated €2.5 billion (approximately USD $2.6 billion) in sales.
The Profi acquisition will more than double the size of Ahold Delhaize’s existing Romanian business, which operates under the Mega Image brand and has 969 supermarkets, predominantly in urban areas. With Profi, Ahold Delhaize can now better serve both urban and rural areas of the country.
Frans Muller, Ahold Delhaize’s CEO, said: "I am very excited to welcome Profi into the Ahold Delhaize family. We have followed the company’s trajectory for a while now and admire what the Profi team has been able to achieve. I strongly believe that Profi has an exciting growth pathway ahead, and look forward to partnering with the team to further solidify our presence in Central and Southern Europe."
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Ahold Delhaize expects to generate significant revenue growth and synergies from the transaction. The company said that these expected synergies will directly benefit Romanian customers through the improved ability for reinvestment in the customer and employer value propositions, digitalization, and ESG.
Wouter Kolk, CEO of Ahold Delhaize Europe and Indonesia, noted: "I’d like to extend a very warm welcome to the full Profi team; we are very pleased to include them in our family. This step forwards fortifies our position in Central and Southern Europe; it also underscores our trust in the potential of the region. Both Mega Image and Profi have been serving Romanian customers successfully in the past decades, which translated into increased loyalty and growth. By joining our family, the combination will benefit from our European best practices in the fields of digitalization, sourcing, extended local assortment, infrastructure and sustainability. I am excited for the journey ahead."
The transaction is subject to conditions including merger clearance under applicable competition laws and regulations. Closing is expected in 2024.
Ahold Delhaize will publish its third-quarter 2023 results on Nov. 8. For its previous quarter, the company reported that its U.S. division achieved net sales of €13.6 billion (USD $14.9 billion), an increase of 2.7% at constant exchange rates and up 0.3% at actual exchange rates. U.S. net sales were driven by comparable-sales growth, excluding gasoline, of 3.6%, partly offset by lower gasoline sales. Excluding the impact of weather and calendar shifts, U.S. comp growth was 4.0%, partly offset by the end of emergency SNAP governmental benefits and the moderation of inflation rates. Food Lion and Hannaford continued to lead brand performance, with Food Lion delivering its 43rd consecutive quarter of positive sales growth.
Ahold Delhaize USA, a division of retail conglomerate Ahold Delhaize, operates more than 2,000 stores across 23 states and is No. 10 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. PG also named the company one of its Retailers of the Century and among its 10 Most Sustainable Grocers.