Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Summary: Dutch supermarket operator Royal Ahold NV, under pressure from shareholders upset by its poor performance against U.S. competition, is selling its U.S. foodservice unit and its 121 Tops superstores. The object is to raise over $5 billion and improve sales growth at its other U.S. chains. The company's supermarkets and superstores have been overshadowed by Wal-Mart and Kroger and have been hurt by the overall decline in U.S. consumer spending. The asset sales may help Ahold complete a merger with the Delhaize Group, a Belgian owner of U.S. grocery chains. Such a merger would benefit Delhaize by expanding its geographic distribution and Ahold by improving its competitive advantage against the American giants. Ahold's shares, which plummeted more than 75% in 2002 and 2003 after the revelation of a profit-inflation scandal, have climbed 32% this year and 24% over the past six months.
Related links: Troubled Retailer Ahold Reports Improved Profits • Ahold [FT.com via Yahoo Finance] • Ahold to Boost U.S. Retail Unit, Return About $2.5 Billion to Holders [Wall Street Journal] • Ahold to sell U.S. foodservice unit, cut costs [MarketWatch]
Potentially impacted stocks and ETFs: Koninklijke Ahold NV (AHO), Sysco Corp. (NYSE:SYY), Wal-Mart Stores Inc. (NYSE:WMT), Delhaize Group (DEG)
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