Dutch retail giant Ahold has announced that it has entered into an agreement to sell its US retail subsidiaries BI-LO and Bruno's to an affiliate of US private investment firm Lone Star Funds for total cash proceeds of up to US$660m.

The final purchase price is subject to customary price adjustments, Ahold said, adding that it expects to complete the deal in the first quarter of 2005.

BI-LO and Bruno's operate in the southeastern region of the United States with a combined store count of over 450 supermarkets and combined 2003 net sales of approximately €4.7bn (US$6.3bn).
 
"This divestment comes at the end of a year of transition for Ahold and marks a major milestone along our Road to Recovery," said Ahold president and CEO Anders Moberg.

"Divesting BI-LO and Bruno's is part of our strategy to optimise our portfolio and strengthen our financial position by reducing debt. Our US retail business will be fully focused on our other prominent supermarket operations, Stop & Shop/Giant-Landover and Giant-Carlisle/Tops. We committed ourselves to a caring and careful divestment of BI-LO and Bruno's in the best interests of our associates and shareholders. This has been achieved and our 'Road to Recovery' is on track," he added.
 
Ahold acquired BI-LO, headquartered in Mauldin, South Carolina, in 1977. The company operates 287 stores in South Carolina, North Carolina, Georgia and Tennessee. Ahold acquired Bruno's, based in Birmingham, Alabama, in 2001. The company operates 168 stores in Alabama, Florida, Georgia and Mississippi.