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    Ahold Foodservice Unit Buys Allen Foods

    AMSTERDAM - Dutch retailer Royal Ahold NV said Thursday that its US Foodservice unit has signed an agreement to purchase St. Louis, Missouri-based food distributor Allen Foods.

    AMSTERDAM - Dutch retailer Royal Ahold NV said Thursday that its US Foodservice unit has signed an agreement to purchase St. Louis, Missouri-based food distributor Allen Foods.

    Allen Foods had sales of $245 million in its last fiscal year. The purchase price wasn't disclosed.

    US Foodservice will finance the acquisition from existing funds, Ahold spokesman Nick Gale said. The acquisition doesn't include Halben Food Manufacturing Co. Inc., which was retained by the Allen shareholders, the company added.

    While some analysts were upbeat that the move could help Ahold -- which generates some two-thirds of its revenue in the United States -- increase its presence in the U.S. Midwest, others saw it as yet another confusing move by management, according to a Reuters report.

    Critics said the purchase contradicted statements made by management last month after a profit warning that Ahold, which has been highly acquisitive in recent years, would sell underperforming and non-core units to focus on organic growth.

    "I think the market is a bit surprised that it (Ahold) is spending millions on takeovers at a time when it needs to restructure and reduce debt," one trader said.

    Ahold, which operates U.S. supermarkets like Stop & Shop, Giant-Landover, Giant-Carlisle and BI-LO, has lost 58 percent of its market value this year amid tough trading conditions.

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