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Ahold Delhaize Augments E-commerce Operations with FreshDirect Acquisition

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As its name implies, FreshDirect focuses on fresh food.

Dutch grocery company Ahold Delhaize just beefed up its online grocery business in a big way by acquiring a majority share in FreshDirect, a New York City-based online grocer.

“FreshDirect is a leading local brand in the fast-growing online grocery sector in the New York City metro area, one of the most important e-commerce food markets in the United States,” said Frans Muller, Ahold Delhaize’s CEO.

Ahold Delhaize is entering into a definitive agreement with Centerbridge Partners on the acquisition. Ahold Delhaize will acquire the majority share, funded by cash, and Centerbridge Partners will be a minority equity investor with a 20% stake.

After the deal closes, FreshDirect will retain its brand name, report to a seven-person board, and continue to independently operate out of its facility in New York City. Financial terms of the deal were not disclosed. The transaction is expected to close in the first quarter of 2021.

Zaandam, Netherlands-based Ahold Delhaize operates Ahold Delhaize USA, which consists of several grocery banners including Food Lion, Hannaford, Stop & Shop, Giant Food, Giant Food Stores and e-grocer Peapod.

Muller touted FreshDirect’s “exceptional” brand recognition, which he said has generated “remarkable” customer loyalty.

“This acquisition further propels our omnichannel evolution,” he added. “It is a great addition and fit for our portfolio. The deal allows us to reach additional customers in the New York trade area and therefore will add incremental sales to the business. It further enables us to address customers’ growing preference for convenient ways to shop.”

FreshDirect has been in business for more than 20 years. The company focuses on fresh food, which represents more than 60% of its sales. The company operates a fulfillment center in the Bronx. Its e-commerce platform enables customer ordering, from picking through packing, to last mile delivery, including the ability to provide same day and rush delivery.

“We are strong believers that the future of grocery retail involves getting customers the best quality food, exactly when they want it, with the best customer service,” said David McInerney, FreshDirect’s CEO. “We have built FreshDirect into a reliable and recognizable business to serve this purpose. This transaction marks an important milestone in the continued growth of FreshDirect. I believe Ahold Delhaize’s global scale, focus on strong, leading local brands, and ability to utilize cost-of-goods synergies, will allow FreshDirect to achieve its full potential.”

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