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Au Revoir, Ahold
Royal Ahold, the Dutch grocery giant that's had a wild ride during its sojourn in the United States—including near bankruptcy after an accounting scandal—says it plans to delist from American markets.
The grocer, which owns Stop & Shop and Giant-Landover supermarket chains in the U.S., has struggled to right its business since it stumbled in 2003 into major accounting scandal at American subsidiary, US Foodservice.
The U.S.-based food distribution arm has since been jettisoned—its was sold to private equity investors last month for $7.1 billion, which greatly helped Ahold's bottom line—but its share price plunged after the scheme to fraudulently boost its operating results forced Ahold to restate its earnings by nearly $1 billion.
Ahold, which operates the Albert Heijn supermarket chain in The Netherlands, also jettisoned C.E.O. Anders Moberg last month, and has labored to overhaul its underperforming American supermarket operations. They are being buffeted by the increase in upscale grocery stores.
At the same time it said it would quit the U.S., Ahold posted a $3 billion profit in the second quarter, bolstered by the US Foodservice sale. That was on top of the $1.36-a-share buyback program it announced, and the $4.09 billion extraordinary dividend issued earlier this month.
Even so, Ahold said it plans to remove its depository receipts from the New York Stock Exchange and de-register from oversight by the U.S. Securities and Exchange Commission as part of its "strategy to improve cost effectiveness by reducing complexity."
That can't be cheery news for stockholders, but the company insisted that its departure from supervision won't detract "from the integrity of its corporate governance and control processes." That's all right, then.
by Elizabeth Olson
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