Asset sales in South America and Malaysia are in the works but are insufficient to cut Ahold debt as much as analysts and investors would like, according to the New York Times. This has sparked suggestions that the international food conglomerate put its U.S. Foodservice (USF) unit on the block, the Times reports.
The Columbia, MD, based broadliner is the second largest in the nation, at $17.5 billion in sales last year. It is currently under investigation by Ahold and U.S. regulators for overstated profits of some $500 million over the 2001-2002 period.
"I don't think there are any synergies between retail grocery and foodservice distribution," commented Mitchell J. Speiser, a senior equity analyst at Lehman Brothers, in the Times story on Saturday. "If they do have to shed assets, it would make sense to get rid of that."
However, it is "not obvious" who might buy USF, according to analysts cited.