Ahold is refocusing its portfolio in order to operate as market leaders in local food retail markets in the United States and Europe where it can secure a number one or number two position with clear prospects for sustainable profitable growth. The Company also decided to focus its resources and expertise wholly on the future growth of its retail businesses. As a result, a number of divestments were announced.
At the end of 2007, Ahold’s portfolio comprised: Albert Heijn and a 73 percent stake in Schuitema in the Netherlands, Albert and Hypernova in the Czech Republic and Slovakia, Giant-Carlisle and Stop & Shop/Giant-Landover in the northeast United States, a 60 percent stake in ICA in Sweden, Norway and the Baltics, and a 49 percent stake in Jerónimo Martins (JMR) in Portugal. Ahold is currently in discussions aimed at divesting its stake in JMR and its majority interest in Schuitema (announced in January 2008). During the year, the Company announced its decision to retain its operations in Slovakia, reflecting improved performance and the current difficult financial markets.
During 2007, Ahold completed its planned divestments of U.S. Foodservice, Tops, and its Polish operations. The U.S. Foodservice sale was completed in July to a consortium of Clayton, Dubilier & Rice Fund VII, L.P. ("CD&R") and Kohlberg Kravis Roberts & Co L.P. ("KKR") for a purchase price of $7.1 billion. The sale of the Company's Polish operations to retailer Carrefour was also completed in July, in a transaction valued at €375 million. The sale of Tops was completed in December to Morgan Stanley Private Equity in a transaction valued at $310 million.
With these transactions, the divestment program has largely been completed and exceeded expectations in terms of value and speed of execution. The total divestment proceeds received in 2007 were €5.4 billion. As a result, Ahold was able to return €3 billion to shareholders through a capital repayment and reverse stock split and €1 billion through a share buyback program. The cash from divestments, together with improved cash generation from the business, will also enable the planned €2 billion reduction in gross debt.
Ahold continues to consider all opportunities to improve shareholder and stakeholder value, including acquisitions, divestments and other potential cooperative ventures.