Bi-Lo acquires 72 Sweetbay stores

Bi-Lo acquires 72 Sweetbay stores

Belgium-based retailer Delhaize Group has struck a deal to sell US chains Sweetbay, Harveys and Reid's to local rival Bi-Lo Holdings for US$265m.

Bi-Lo will take control of the 155 stores as well as the leases for 10 former Sweetbay locations.

In 2012, the 165 outlets generated revenues of around $1.8bn. Delhaize will retain control of the Sweetbay distribution centre. The move comes as part of Delhaize's efforts to improve margins at its US business, which generates almost two-thirds of the group's revenue.

As part of this process, Delhaize has already closed over 100 US stores and withdrawn its Bloom banner from the market. The group has also shaken up its management in the country and cut its workforce to reduce its cost base. Moving forward, Delhaize seems poised to invest in driving growth at its larger Food Lion and Hannaford banners as well as expanding its discount chain Bottom Dollar Food.

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Delhaize Group announces agreement on sale of Sweetbay, Harveys and Reid's5/28/2013

BRUSSELS, Belgium, May 28, 2013 - Delhaize Group (Euronext Brussels: DELB, NYSE: DEG), the Belgian international food retailer, announces that it has reached an agreement with Bi-Lo Holdings, LLC ("Bi-Lo Holdings") on the divestiture of Sweetbay (72 stores), Harveys (72 stores), and Reid's (11 stores). Delhaize Group announces that it has signed an agreement with Bi-Lo Holdings to divest its Sweetbay, Harveys, and Reid´s operations for $265 million in cash. As part of the transaction, Bi-Lo Holdings will also acquire leases for 10 prior Sweetbay locations.

Delhaize will retain Sweetbay's distribution center. In 2012, the 165 stores included in the transaction generated revenues of approximately $1.8 billion. "We would like to thank the associates of Sweetbay, Harveys, and Reid´s for their ongoing commitment and accomplishments throughout the years." said Delhaize Group CEO Pierre-Olivier Beckers. "We believe this transaction represents a significant move towards simplifying our business and will allow for even greater focus at Delhaize America. The transaction will further increase the financial flexibility required to execute our strategic priorities." The transaction is expected to close in the fourth quarter of 2013 and is subject to regulatory approval as well as customary closing conditions and working capital adjustments. Lazard acted as financial advisor to Delhaize Group for this transaction.

Original source: Delhaize Group