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ZAANDAM, Netherlands - After announcing over the weekend that it will sell its Spanish stores to private equity investor Permira Funds for $849 million, shares in Royal Ahold gained more than 3 percent on Monday.
The Dutch food retailing giant said last November it wanted to dispose of its Spanish operations, which include 600 supermarkets and hypermarkets in mainland Spain and the Canary Islands.
The deal, due to be finalized by the end of the year, is part of the review of the group's activities undertaken by its management after a financial scandal in 2003 brought the global retailer to the brink of bankruptcy.
Permira, a venture capital group based in London, is a private equity firm that advises the 18 Permira funds totaling more than $13 billion. The firm has invested in more than 260 transactions in 15 countries, in companies across a variety of sectors and geographies.
"This divestment is part of our 'Road to Recovery' strategy to optimize our portfolio and to strengthen our financial position," Anders Moberg, Ahold president and c.e.o., said in a statement. "It represents an important milestone in our divestment program and demonstrates our continued focus on improving the balance sheet by reducing net debt."
Last month, Ahold reached a settlement with Dutch legal authorities for accounting irregularities under which the company is to pay 8 million euros, but the company's former chief executive, Cees van der Hoeven, has been summoned to appear in court on Oct. 13.
Ahold has said it hopes to sell off its U.S. Bi-Lo and Bruno divisions by the end of the year.