Ahold Delhaize NV and private equity firm Centerbridge Partners LLC have entered into a definitive agreement to acquire New York-based online grocer FreshDirect as the coronavirus pandemic and growing acceptance of e-commerce prompt more consumers to buy groceries online.
Ahold will take a majority stake and Centerbridge will own 20% of FreshDirect, which will keep its name and operate independently. Terms of the transaction were not disclosed, and a closing is expected in the first quarter of 2021.
Based in the Bronx, New York City, and known for its green-and-orange trucks, FreshDirect specialises in fresh food, which it says represents more than 60% of sales.
The privately-held company was founded in 2002 and operates in seven US states, including the New York City and Philadelphia metropolitan areas, and Washington, DC.
Ahold is based in the Netherlands and has several US brands, including Stop & Shop, Food Lion, Giant Food and Hannaford.
Online Shopping
A recent study by e-commerce specialist Mercatus and the research firm Incisiv said online purchases should account for 10.2% of this year's $1.04 trillion US grocery market, triple the percentage in 2019.
The study also said online purchases may command 21.5% of a total $1.16 trillion grocery market in 2025, close to 60% above pre-pandemic estimates.
Larger retailers, including Amazon.com Inc and Walmart Inc, are also increasing online sales of essentials such as food.
Goldman Sachs and the law firm Latham & Watkins advised FreshDirect on the transaction. Bank of America and the law firm Kirkland & Ellis advised Ahold, and the law firm Fried, Frank, Harris, Shriver & Jacobson advised Centerbridge.
