Food retailer Royal Ahold NV (AH.AE) Monday said it will acquire internet store bol.com for EUR350 million, in a push to expand its online offerings and broaden its product offering, to books, TVs and dishwashers.
Ahold said it will acquire bol.com from private equity firms Cyrte Investments and NPM Capital in an all-cash deal, adding that the transaction should add to earnings "from day one."
"Bol.com provides us with the platform, scale and expertise we need to accelerate our growth in online retailing," said Ahold Chief Executive Dick Boer. "Together, we will be able to offer customers more choice, greater convenience and better value."
Bol.com, the biggest internet store in the Netherlands, recorded EUR355 million in sales in 2011, around 1% of Ahold's total revenue. The website was established in 1999 by German publisher Bertelsmann AG as an outlet for books and CDs and later expanded into selling toys, consumer electronics and household goods.
Ahold said bol.com has solid growth prospects in the Netherlands and Belgium and that its products will complement its existing online offerings of food groceries.
Retailers are seeking to expand their online sales, which have flourished in the tough economic climate as customers have become more price-sensitive and are attracted by the wide range of products available on the internet. Shopping online has also become easier due to the rise of the smartphone.
Last month, the European Commission said online sales could boost economic growth and it outlined measures to double the share of e-commerce in retail sales from a current level of 3.4%.
"We expect multi-channel retailing to be a growing strategic force," Shore Capital analysts said in a note. "We anticipate more such fusion to feature from grocery retailers at heart in the future."
Ahold currently generates around EUR500 million in online grocery sales through its Peapod.com website in the U.S. and Albert.nl in the Netherlands. It aims to triple sales from these websites by 2015.
The retailer also plans to save money by having customers pick up their online grocery orders from designated locations as opposed to its current home delivery service, it said at an investor conference in November.
- By Maarten van Tartwijk; Dow Jones Newswires; +31 20 571 5201; firstname.lastname@example.org