Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Supermarket owners to divest 76 stores, alleviating states’ anticompetitive concerns, (Jul 26, 2016)
Organizations Mentioned:Delhaize Group | Delhaize Group NV/SA | Koninklijke Ahold N.V.
By Greg Hammond, J.D.
Koninklijke Ahold N.V.—the owner of Giant supermarkets—and Delhaize Group NV/SA—the owner of Food Lion supermarkets—have agreed to sell 76 stores to settle allegations, brought by the attorneys general from Delaware, Maryland, West Virginia, Virginia, Massachusetts, and Pennsylvania—that the proposed $28 billion merger would be anticompetitive. The agreement comes just days after the FTC announced its own consent agreement, requiring divestiture of 81 stores (Commonwealth of Massachusetts v. Koninklijke Ahold N.V., Case No. 1:16-cv-01512-TFH).
According to states’ complaint, the merger—if consummated—would likely substantially lessen competition for the retail sale of food and other grocery products in supermarkets in the relevant geographic markets by: (1) eliminating direct and substantial competition between Ahold and Delhaize; (2) increasing the likelihood that Ahold will unilaterally exercise market power; and (3) increasing the likelihood of, or facilitating, coordinated interaction between the remaining participants. The ultimate effect of the merger, according to the states, would be to increase the likelihood that the prices of food or groceries would increase, and that the quality and selection of food, groceries, or services would decrease, in the relevant geographic markets. The state attorneys general therefore claim that the transaction would violate the Clayton Act and various state antitrust laws.
The proposed final consent judgment in the instant case requires that Ahold and Delhaize divest 76 stores, pursuant to the timing requirements and other relevant provisions of the FTC consent agreement. Ahold and Delhaize also must continue to operate certain assets and must pay the plaintiffs $300,000 for their reasonable costs and attorney fees.
Companies: Koninklijke Ahold N.V.; Delhaize Group NV/SA
News: AcquisitionsMergers Antitrust