Disco. Through a series of purchases made from 1998 to 2002, we directly and indirectly increased our ownership in
Santa Isabel to 99.6% and in Disco to 99.97%. As a result of VRH's default on certain indebtedness, we were required to
purchase substantially all (44.1% of DAIH shares outstanding) of VRH's shares in DAIH and to repurchase certain
indebtedness.
Disco has operations in Argentina and is the second largest supermarket company in Argentina based on fiscal 2002
retail sales. In 1999, Disco acquired the Americanos, Gonzalez and Pinochio supermarket chains. In January 2000, Disco
continued to expand, acquiring 100% of the outstanding shares of Ekono. As of the end of fiscal 2002, Disco operated
237 stores. Prior to fiscal 2001, Disco primarily operated supermarkets that targeted high-end customers in the cities
of Buenos Aires and Cordoba and in the northwest provinces of Argentina. In Mendoza, in the west of Argentina, Disco
operates a more popular store format under the name "Super VEA." In light of the deteriorating economic condition in
Argentina and in order to reach more customers, a compact hypermarket format was developed in 2001 under the name
"Plaza Vea." In 2002, due to the severe economic crisis in Argentina, Disco initiated a large restructuring initiative in order
to reduce costs and to adapt to the new environment in the longer term. Subsequently, an effort was started to convert all
Disco supermarkets in the northwest to lower-end supermarkets under the brandname "Super VEA." Further initiatives
were undertaken to develop a new low-end format under the name "Despensa Vea."
Disco, which had been previously fully consolidated in our financial statements, was deconsolidated for the first quarter
of fiscal 2002, fiscal 2001 and fiscal 2000. Thus, Disco's net sales for the first quarter of fiscal 2002, fiscal 2001 and
fiscal 2000, which were EUR 251 million, EUR 2.1 billion and EUR 2.2 billion, respectively, are not included in our net
sales for the retail trade operations for our consolidated subsidiaries in Latin America in the table above. As of the end of
fiscal 2002, Disco operated 237 stores.
Santa Isabel
Santa Isabel was the third largest supermarket company in Chile and the second largest in Peru based on fiscal 2002
retail sales, and also had operations in Paraguay. As of the end of fiscal 2002, Santa Isabel operated 119 stores, with
77 stores in Chile, 32 in Peru and ten in Paraguay. In Chile, Santa Isabel primarily operated supermarkets focused on
high-end customers. One compact hypermarket was developed in fiscal 2001 and two more in fiscal 2002 in order to
reach lower-end customers. In Peru, Ahold primarily operates Santa Isabel supermarkets and compact hypermarkets
under the name "Plaza Vea" since fiscal 2001. In Paraguay, we operated supermarkets under the name "Stock."
Santa Isabel, which had been previously fully consolidated in our financial statements, was deconsolidated for the first
two quarters of fiscal 2002, fiscal 2001 and fiscal 2000. Thus, Santa Isabel's net sales for the first two quarters of fiscal
2002, fiscal 2001 and fiscal 2000, which were EUR 365 million, EUR 771 million and EUR 764 million, respectively,
are not included in our net sales for the retail trade operations for our consolidated subsidiaries in Latin America in the
table above. As of the end of fiscal 2002, Santa Isabel operated 119 stores.
In April 2003, we announced our intention to divest our operations in South America, including our operations in
Argentina, Chile, Peru and Paraguay.
In July 2003, we divested our operations in Chile by selling our interest in Santa Isabel for net proceeds of approximately
USD 77 million, which includes the buyer's assumption of external interest-bearing debt of USD 18 million and negative
working capital of USD 56 million. In September 2003, we divested our operations in Paraguay by selling our 100%
interest in Supermercados Stock S.A. to A.J. Vierci. We still own Santa Isabel's operations in Peru, which we expect to sell.
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