Two of Europe’s major supermarket chains, Royal Ahold and Delhaize Group, today announced rise in fourth quarter profits. Ahold and Delhaize, working closer to a merger, have raised their dividends as well. Netherlands-based Ahold made a 16 percent rise in profits contrasted to the previous year, making a net profit of $276 million in the last three months of 2015. The company also has announced an increase in its full year dividend by 8% to EUR0.52 a share.
Meanwhile, Belgium based food retailer Delhaize reported a a net profit of EUR114 million in the fourth quarter. The company’s revenue rose 9 percent to EUR6.3 billion. This is up from a net loss of EUR55 million in the same period a year earlier. It has also announced a dividend of EUR1.80 a share, a 13% rise from 2014. Both Delhaize and Ahold have announced their merger plan last year. The proposed merger plan would be an all-share deal that would create one of the largest supermarket operators in the U.S. The deal comes as the grocers are seeking to increase scale as they grapple with slow growth and fierce competition from discounters.
The merged company will make almost two-thirds of its sales on the U.S. East Coast, where Ahold operates the Giant and Stop & Shop chains and Delhaize owns Food Lion and Hannaford. According to the company insiders, the merger deal would be signed by this summer. The shareholders are scheduled to vote on the tie-up on March 14. The new company will be named Ahold Delhaize and be based in the Netherlands.