March 29, 2017

Ahold Delhaize Updates on Store Divestments and Strategy

1) The Belgian Competition Authority (BCA) approved the merger of and on March 15, 2016. The approval was conditional upon the divestment of a number of stores and projects, in Belgium, to address competition concerns. 2) announced on March 13, 2017, the first set of agreements for the Belgian operations, which included the divestment of five stores and one project. 3) The second set of sale agreements was announced on March 23, 2017, and included the divestment of four stores and one project, in Belgium. 4) The firm’s key priority over the next few years is to make the Delhaize Le Lion banner “the favorite of the Belgians,” and will invest in strengthening its offer and customer experience.

The BCA approved the merger of Dutch grocer Ahold and Belgian supermarket group Delhaize on March 15, 2016, and the combined entity began operations as Ahold Delhaize on July 24, 2016. In order to address competition concerns, the regulator attached the following conditions to the approval: that Ahold Delhaize divest eight stores, five Delhaize-affiliated stores and a limited number of projects that are in development, in Belgium. Ahold Delhaize announced the first set of sale agreements on March 13, 2017, which included the divestment of five stores and one pipeline project. The company announced the second set of sale agreements on March 23, 2017, which included the divestment of four stores and one project.

Deborah Weinswig, Managing Director, Fung Global & Technology deborahweinswig@ fung1937.com US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 1 Copyright © 2017 The Fung Group. All rights reserved.

March 29, 2017

These are summarized in the table below:

Figure 1. Belgium: Summary of Ahold Delhaize’s Store Divestment Agreements Store Stores to be Divestments Divestments Stores Banners/Projects Divested Per and Buyers and Buyers Remaining the BCA’s Announced on Announced on Conditions March 13, 2016 March 23, 2016 Albert Heijn Stores 8 • 3 to • 1 to 2 • 1 to Tanger • 1 to an independent entrepreneur Delhaize-Affiliated 5 • 1 to Tanger • 2 to Carrefour 2 Stores Project “Limited • 1 to Lidl • 1 to Carrefour N/A Number” Source: Ahold Delhaize Press Release

Belgium Strategy Along with the store divestment announcement on March 23, 2017, Ahold Delhaize provided an update on its strategy for Belgium. The firm will invest in strengthening Delhaize Le Lion’s offer and customer experience, as its key priority over the next few years is to make the banner “the favorite supermarket of the Belgians.” The company also plans to bring the Ahold Delhaize Belgium under the Delhaize Le Lion banner, once it completes the improvements. • Our coverage of Ahold Delhaize’s FY16 results can be found at bit.ly/ADFY16 • Our report on the company’s strategy discussed at its Capital Markets Day 2016 can be found here: bit.ly/ADStrategy

Deborah Weinswig, Managing Director, Fung Global Retail & Technology deborahweinswig@ fung1937.com US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 2 Copyright © 2017 The Fung Group. All rights reserved.

March 29, 2017

Deborah Weinswig, CPA Managing Director Fung Global Retail & Technology New York: 917.655.6790 : 852.6119.1779 : 86.186.1420.3016 [email protected]

Swarooprani Muralidhar Research Assistant

Hong Kong: 8th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: 852 2300 4406

London: 242–246 Marylebone Road London, NW1 6JQ Tel: 44 (0)20 7616 8988

New York: 1359 Broadway, 9th Floor New York, NY 10018 Tel: 646 839 7017 FungGlobalRetailTech.com

Deborah Weinswig, Managing Director, Fung Global Retail & Technology deborahweinswig@ fung1937.com US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 3 Copyright © 2017 The Fung Group. All rights reserved.