AMSTERDAM - Dutch supermarkets group Jumbo bought Super De Boer for 552.5 million euros ($825 million) on Monday, fighting off a rival bid to create a chain of stores that will pressure market leader Ahold.
Analysts said the deal could prompt a wave of consolidation and price competition in the Dutch supermarket sector, where smaller firms have struggled for years with Ahold's dominance.
We are convinced that this is a very attractive transaction for all of our stakeholders, including our employees, franchisees, shareholders and ... our customers, Super de Boer Chief Executive Jan Brouwer said.
Super de Boer shares were up 4.4 percent at 4.71 euros by 1409 GMT, outperforming the Amsterdam small cap index .ASCX which was up 1.3 percent.
Jumbo's original bid for Super De Boer prompted a rival offer from Sperwer, while two other supermarkets later joined the battle, separately backing the different offers.
Jumbo won on Monday with a revised bid of 4.82 euros per share in cash, topping Sperwer's 4.50 euros. Sperwer said in a statement it would drop its bid for Super de Boer, which is 57 percent-owned by French peer Casino.
Jumbo's improved offer for Super de Boer will not be surpassed by Sperwer and we believe that it is unlikely to be surpassed by another suitor, SNS Securities analyst Richard Withagen said, downgrading Super de Boer's shares to sell from hold.
As part of the deal, Jumbo agreed to sell 80 Super De Boer stores to rival Schuitema, which owns the Netherlands' second largest supermarket chain C1000. The rest of the Super de Boer stores will be converted to the Jumbo brand.
The Jumbo/Super de Boer combination and Schuitema will join forces as a purchasing cooperative, which will have a 25 percent market share, Schuitema said in a statement.
The deal increases competition for Ahold, which owns the Albert Heijn chain, and has more than a 30 percent market share.
Discounters such as Aldi and Lidl held a 8.5 percent and 4.8 percent market share in 2008, according to researcher Nielsen.
The deal would also yield synergies both in sales and in operational costs, Jumbo's chief financial officer Ton Van Veen said, declining to give a target.
Jumbo's offer is for assets and liabilities, but not for the shares. Jan Maarten Slagter, director of the shareholders group VEB, said that was unusual when buying a listed company and was meant to lock out minority shareholders.
But van Teen told Reuters the formula had worked for Jumbo in the past.
It is not uncommon in our business to buy assets and liabilities, he said. This is the way we have built the company in the past and that is the way we do it best.
Casino said in a separate statement the price valued the business at 13.9 times estimated EBITDA and would give it a gross capital gain of some 60 million euros. The deal would also allow Casino to reduce its debt by around 400 million euros.
Funding of the offer is guaranteed 100 percent by ING, Jumbo told reporters, while ABN AMRO, Rabobank and NIBC are part of the banking consortium.
NIBC and Bank of America Merrill Lynch advised Super de Boer. (Additional reporting by Aaron Gray-Block in Amsterdam and Dominique Vidalon in Paris; Editing by David Holmes and Lin Noueihed) ($1=.6694 Euro)