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Ahold Delhaize: Another Merger Does Not Seem Unlikely


  • Ahold Delhaize delivered a good 2017 earnings report.
  • Competition of Amazon and Lidl is coming.
  • Acquisitions/mergers can offer a solution to this problem.

Source: Google Images

Ahold Delhaize's (OTCQX:ADRNY) (OTCQX:AHODF) share price was €19.25 at end of the trading session of the 13th of June 2017. In one week, the stock tumbled to €16.04. The stock crashed for two reasons. The first was competitor Lidl announcing that it would open 10 stores in east America. The second reason was Amazon (AMZN) announcing that it would also join the food retailer market by buying out Whole Foods. These 2 events caused Ahold's stock to decline 16%. Currently, the stock recovered and it is trading back at its old level. This made me reconsider if I should still hold my Ahold shares, even with the upcoming competition.


The Dutch company Ahold merged with the Belgian Delhaize on July 23, 2016. Synergies of the merger still have to kick in. Because of this, the company still reports its earnings Pro Forma. The Pro Forma information represented below includes the historical results of pre-merger Ahold and Delhaize and post-merger Ahold Delhaize.

Before starting to discuss the fundamentals, I would like to point out that Ahold Delhaize is a Dutch/Belgian company and thus reports its earnings in euros. Currently, the EUR/dollar exchange rate swings between 1.20 and 1.25. You should realize that by investing in Ahold Delhaize as a U.S. investor, you are exposed to (unwanted) exchange rate wins or losses.

Source: Ahold Delhaize Q4 2017 Summary Report

Ahold Delhaize reports its earnings in 5 different categories, Ahold USA, Delhaize America, The Netherlands, Belgium and Central and Southeastern Europe. The earnings data above shows the company's group performance in 2017. Every segment managed to grow net sales that year (cannot be seen in the diagram), but still the overall net sales declined by 2.8%. This is due to the stronger euro. As I pointed out earlier, currency risks are a real threat to Ahold Delhaize's top and bottom

This article was written by

Hi fellow (Millennial) Investors,I have been using SA for almost 2 years now and have discovered that there are a lot of (almost) retirees on the website. Therefore, there are a lot of articles for specifically older investors. This kind of bothered me at first, but I decided to fill up this gap my self!

Analyst’s Disclosure: I am/we are long ADRNY, AHODF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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