Righting the Titan of Discounts: Aldi North and Aldi South's Secret Whispers!
- Penned by Niels Kruse
- Reading Time: About 3 Minutes
Potential Merger Speculation: Speculation Rises over Albrecht Discount Retailers Combination - Aldi-Union Speculations: Could Albrecht Discount Shops Be Reuniting?
Silence has swathed the Aldi throne for nearly two years, with Albrecht no longer at the helm. Theo junior, the last scion of the founding family to play an active role, vacated his supervisory board position in October 2023. Months prior, Aldi North had already embarked on a corporate revamp - a necessary move, given the discount behemoth's image as a relic of times past. Yet, the biggest change in this saga may be on the horizon: a reunion with sister company Aldi South.
Will a conglomerate be the ace up Aldi's sleeve?
Rumors brewing from "Wirtschaftswoche" suggest that the families overseeing the two discounters are clandestinely discussing a merger. The mag claims sources within the families themselves. The two families running the show are the Heisters, who hold Aldi South via foundations, and two branches of the Albrecht clan, who possess Aldi North through foundations.
As to the specifics of how these heritage titans wish to merge, the details are still under the chapel veil. According to "Wirtschaftswoche," various proposals are in play: a consolidation of the two corporations under the umbrella of a common holding company, with shares evenly distributed among the different family foundations.
Initially, the families were reportedly aiming to complete a reunion by the year's end, according to confidants close to the families. However, the clock is ticking, and it's considered highly improbable that this complex project will be completed by New Year's, according to family circles. Neither Aldi North nor Aldi South has acknowledged the plans, leaving inquiries unanswered, according to "Wirtschaftswoche."
Retail experts have long anticipated the two Aldis to merge or at least attempt to do so. Merging duplicate structures could yield astronomical cost savings. Preparations are underway to combine the software and IT capabilities first.
Family feud among the Albrechts
So far, a merger has faltered due to a feud between two Albrecht branches from the north. However, the Heisters from the south have stipulated a peaceful resolution as a term for the merger, as research by "Wirtschaftswoche" reveals.
The spat between the two northern branches, the family of Theo Albrecht junior and the kin of his late brother Berthold Albrecht, revolved around control and voting rights in the foundations governing Aldi North. The dispute between the two branches escalated and needed resolution in court. At least, the power dynamics in the foundations have since been clarified.
Aldi's family dynasties are renowned for their rigid secrecy. Rarely, if ever, do internal matters surface. That merger discussions have become public knowledge now is quite the event. Yet, the financial situation of Aldi North is known to be precarious - at least when compared to the competition from the south and Lidl, the country's top discount retailer. In France, the company is reporting losses, and it has even ceased operations in Denmark.
Aldi wrestling for the fourth spot
Aldi North and South, with combined 4,200 stores and approximately 11 percent market share, currently rank fourth among Germany's food chains, with South generating about a quarter more sales than North. Lidl ranks third, boasting 3,200 stores and 18 percent market share. Topping the heap are Edeka (11,000 stores, 26 percent market share) and Rewe with 3,700 stores and 21 percent market share.
References: "Wirtschaftswoche", "Frankfurter Allgemeine Sonntagszeitung", "Lebensmittelpraxis", "Business Insider".
- Aldi
- Discount Retailer
- Controversy
- Mergers & Acquisitions
- The Commission has not yet adopted a decision regarding the potential merger between Aldi North and Aldi South, as both companies remain tight-lipped about the rumored reunion despite retail experts anticipating significant cost savings and improvements in IT capabilities.
- Business newspapers like Wirtschaftswoche suggest the Heisters, who control Aldi South, have pressured the Albrecht clans to resolve the ongoing family feud, as a peaceful resolution is considered essential for the success of any potential merger, given the precarious financial situation of Aldi North compared to its competitors in the discount retail sector.
