Stop and chop

19 May 2006 By John Foley Follow @johnsfoley

The scandalhit Dutch retailer s recovery has proved patchy, and the synergies between its retail divisions elusive. A full breakup would potentially unlock 30% of value and give investors the choice of what to do with the pieces.

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Ahold has commissioned the chief executive of its Dutch operations to perform a strategic review of its retail activities. The Dutch retail giant, which runs the Stop & Shop, Giant and Tops chains in the US, is under pressure to improve its performance after abandoning its 5% sales and operating profit growth targets in March.

Ahold's retail business is split into four separately managed arenas – two representing the US, one the Netherlands and one central Europe. Each has its own chief executive, who reports directly to group chief executive, Anders Moberg. Ahold also runs US Foodservice, which supplies food to restaurants, schools and hospitals.

The group recently agreed to pay E940m to settle a class action lawsuit relating to improper accounting allegations levelled at the previous management. In the last two years, Ahold's shares have underperformed rivals Tesco by 15%, Metro by 11% and Carrefour by 6%.

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