FreshDirect CEO says customers have nothing to fear after Dutch grocer buys majority stake
KEY POINTS
Ahold Delhaize and Centerbridge Partners are buying FreshDirect, but the grocery delivery company will still operate independently.
Financial terms of the deal were not disclosed, but the Stop & Shop owner will hold a majority stake.
FreshDirect CEO David McInerney said on CNBC’s “Squawk Box” that the company is seeing “strong double-digit growth.”
FreshDirect customers have nothing to fear after the company was bought by the Dutch owner of Stop & Shop and Food Lion, the grocery delivery service’s CEO said Tuesday.
Ahold Delhaize and Centerbridge Partners, a private equity firm, announced Wednesday that they would be buying FreshDirect. Financial terms of the deal were not disclosed, but Ahold Delhaize will acquire a majority stake and Centerbridge Partners will have a minority investment of 20%.
“Hopefully the only differences that customers see are the benefits,” FreshDirect CEO David McInerney said on CNBC’s “Squawk Box.”
The Dutch company already has a foothold in U.S. grocery e-commerce through Peapod, which was the first company in the country dedicated to online grocery delivery. But FreshDirect’s specialty is fresh food, which represents about 60% of its total sales, and it has a higher market share than Peapod in the New York tri-state area.
McInerney said that he appreciated how Ahold Delhaize plans to preserve the e-commerce company’s brand. FreshDirect will keep its name and will still independently operate its New York City facility.
“I think combining the knowledge of both companies, we can make it even more competitive and compelling,” Ahold Delhaize CEO Frans Muller said.
Stockpiling during the early days of the coronavirus pandemic made online grocery sales soar, and the trend seems to be sticking. Muller said that the pandemic accelerated Ahold Delhaize’s e-commerce business by several years.
“Being that we’re on top of our game right now ... strong double digit-growth, we were naturally attractive, given where the world is in terms of adoption of online food,” McInerney told CNBC’s Becky Quick.
The deal is expected to close in the first quarter of 2021.
