The enforced acquisition by Dutch retail giant Ahold of its Chilean subsidiary Santa Isabel has prompted the company to issue a statement clarifying the agreements with other partner companies in Scandinavia and Central America
Ahold was obliged to make an offer for all the shares in Santa Isabel after buying out its partner in the joint venture which ran the chain. This took Ahold's direct shareholding in Santa Isabel above the 66 per cent threshold set out by Chilean law and above which companies must make an offer to buy out all minority shareholders.
In a statement issued yesterday, Ahold confirmed that it could be obliged to buy out its partners in Scandinavia as well. Ahold owns 50 per cent of ICA Ahold Holding, which controls the region's biggest food retailer, ICA. The remaining shares being held by ICA Forbundet (30 per cent) and by Canica, owned by the Norwegian Hagen family.
Ahold said that the shareholders' agreement allows all partners to sell their shares, although not before April 2004, and that if either ICA Forbundet or Canica decides to sell shares, they must first offer them to the other company. Should the Scandinavian partners fail to reach agreement, Ahold would then be obliged to purchase the shares at a price reflecting the market value of ICA Ahold at the date of sale. Any transaction must consist of a minimum of 5% of the shares in ICA Ahold.
ICA Ahold had 2001 sales of €6.6 billion and 3,100 stores in Sweden, Norway, Denmark, Estonia, Latvia and Lithuania.
Ahold's CFO Michiel Meurs commented: "It is common practice in joint venture arrangements that partners agree on an exit strategy for the joint venture should they wish to terminate the relationship at any point. In that event, we wanted to ensure that Ahold had the right to buy the partners' shares and create a majority position for our company."
In addition to the ICA joint venture, Ahold has another agreement in Central America where it could be obliged to buy out its partner. If the Paiz family's shareholding in the Central American Retail Holding Company, its joint venture with Ahold, were to fall below 13.3 per cent, then the Dutch group would be obliged to buy its shares. At present, the Paiz family holds 33.3 per cent.
The announcement by Ahold led to a drop in the company's shares as investors worried about the prospects of the company being forced to pay out larger-then-expected sums in buying out its partners.