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    Delivering the Goods

    Ahold to acquire remainder of Internet grocer Peapod.

    Dutch convenience store and supermarket retailer Royal Ahold said it would launch a tender offer for the remaining outstanding 42 percent of its Internet grocery unit Peapod Inc.

    Ahold said the $35 million transaction is to be followed by a merger of Peapod with a subsidiary of Ahold. Ahold currently holds a 58 percent stake in Peapod. The acquisition is expected to have an almost neutral impact on Ahold's earnings per share in 2001, the company said.

    The tender offer is expected to be completed in the third quarter of 2001, after which Ahold would acquire all remaining publicly held shares of Peapod through a merger transaction at the same price per share. Peapod will be delisted from the Nasdaq.

    Ahold first acquired majority control of the online company two years ago as it appeared headed for bankruptcy. The company, however, was able to revive delivery sales by leveraging its clout as one of the largest supermarket and convenience store retailers in the nation.

    But it has been a tough road for online grocers and convenience stores, which have had problems raising capital to stay in business. Several financially plagued competitors of Peapod, including Kozmo.com, Webvan and HomeRuns.com, were considered formidable players in the online grocery market just six months ago, yet all three have since halted operations and sought bankruptcy protection.

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