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Royal Ahold Confirms Intent to Sell U.S. Foodservice



The Dutch owner of the second largest American foodservice distributorship and other retail holdings around the world released the news in an e-mailed statement earlier today that was reported by the global news media.

Ahold has recently been forced by shareholders Centaurus Capital Ltd. and Paulson & Co. to sell some holdings and return money to investors as competition hurts sales at its U.S.outlets. In March, Anders Moberg, ceo, cut a sales forecast for the U.S. interests, blaming increased competition with Wal-Mart Stores, Inc., and Kroger Co. Last week, he said slower consumer spending made the third quarter "even more challenging."

"Competition is getting tougher in the U.S. and margins are under more and more pressure," Fernand de Boer, an analyst at Petercam SA, was quoted as observing my news media. "Management is being forced to take notice and act."

U.S. Foodservice, which Ahold bought for $3.6 billion in 2000, had an earnings accounting scandal in 2003 that caused the entire foodservice distribution industry to reexamine its accounting procedures. The bulk of Ahold's 970-million- euro (more than $1.2 billion) profit overstatement came from the distributorship. Ahold in 2004 settled with the U.S. Securities and Exchange Commission without paying a fine, ending a 20-month investigation into accounting fraud.

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