Ahold, the ailing Dutch supermarket group, has begun its withdrawal from the volatile South American market with the conclusion of the sale of is Santa Isabel chain in Chile.
The company, which is facing a substantial reduction in profits as a result of a widespread accounting fraud at its US operations, announced the decision to sell its Chilean arm in February as part of a strategic plan to restructure its portfolio to focus on high-performing businesses and to concentrate on mature and most stable markets.
Santa Isabel, which operates 77 stores in Chile, has been part of Ahold's store portfolio since 1998, although it is less than a year since Ahold took total control of the Chilean business, buying out its erstwhile partner Velox Retail Holdings in October 2002. Now the Dutch group has transferred its 99.6 per cent stake in the company to Cencosud for around $77 million (€68.1m).
The transaction is limited to Ahold's supermarket activities in Chile. Its activities in Peru and Paraguay, previously subsidiaries of Santa Isabel, remain part of the Ahold group, although they too are up for sale. Wal-Mart, the US-based company which is the world's largest retail operator, is thought to be among the leading candidates to acquire the business.
Cencosud has interests in real estate, do-it-yourself (DIY) stores and hypermarkets in Chile and Argentina. Its wholly-owned subsidiary, Hipermercados Jumbo, is the third-largest food retailer in Chile with seven hypermarkets, 16 DIY stores and three shopping centres. The company also operates 11 hypermarkets, 23 DIY stores and 11 shopping centres in Argentina.