CVC Capital to buy 73 per cent in Dutch retailer Schuitema for $1.1 billion

24 April 2008

Mumbai: British private equity firm CVC Capital Partners will acquire 73.2 per cent stake in Dutch food retailer and wholesaler Schuitema NV from Royal Ahold NV, in a deal estimated at €695.4 million ($1.1 billion).

CVC will pay Ahold €185 million in cash for the 73.2 per cent stake and hand back 58 of Amersfoort-based Schuitema's grocery stores that operate under the C-1000 brand, as well as real estate assets. Ahold will also gain a 20 per cent indirect holding in the new entity housing the Schuitema assets, but without any voting rights.

Amsterdam-based Ahold said the deal values the whole of Schuitema at €950 million. The 58 Schuitema stores that Ahold receives would further boost its dominance in the Dutch market, where its Albert Heijn chain already has a 30 per cent share. Ahold plans to convert these 58 stores to its Albert Heijn banner.

Schuitema said in a statement the deal was based on an enterprise value for the whole of Schuitema of €950 million ($1.51 billion).

It said it expected the deal to be completed in the second half of the year and the staggered transfer of stores to Ahold would then start and be completed before the end of the year. After the deal closes, Schuitema said it planned to give other shareholders the opportunity to sell their stakes and then end it's listing on the Amsterdam bourse. It has also said the stake sale should allow it to expand via mergers and acquisitions, with Super de Boer and unlisted chain Plus seen as possible candidates.

The announcement marks a departure from the restructuring plan Ahold initiated in 2006 to raise funds following a 2003 accounting scandal at its US Foodservice Inc unit that brought it to the brink of bankruptcy. The deal with CVC follows three months of talks.