Business NEWS
Belgian supermarket operator Delhaize Group to Buy food retailer BI-LO Assets
By Robert J. Steiner for CEOWORLD Magazine Updated:October 5, 2009
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Belgian supermarket operator Delhaize Group (BE:DELB) (DEG) said that it has signed a non-binding letter of intent to buy a substantial majority of BI-LO’s assets for $425 million.
BI-LO is a food retailer currently operating 214 stores in North Carolina, South Carolina, Tennessee and Georgia in the U.S.
On Mar. 23, BI-LO filed for bankruptcy in the United States Bankruptcy Court for the District of South Carolina. The assets to be included in the deal are estimated to have realized over $2 billion in sales in 2008, Delhaize said.
The supermarket chain employs approximately 15,500 people.
Upon completion of the deal, Delhaize will integrate the BI-LO assets into its Food Lion chain. The chain is based mainly in the southeastern part of the U.S. where it has some 1,300 stores and around 74,000 associates, operating under the names of Food Lion, Bloom, Bottom Dollar, Harveys and Reid’s.
The acquisition of the BI-LO stores in the southern states of the U.S., will make Delhaize’s Food Lion stores more competitive, especially against Wal-Mart Stores Inc., said Bank Degroof’s analyst Ivan Lathouders.
The non-binding offer is subject to the satisfactory completion of the customary steps for such an acquisition including certain Bankruptcy Court approvals. Delhaize Group and BI-LO intend to close the transaction shortly after obtaining the entry of a final non-appealable sale order of the bankruptcy court pursuant to Section 363 of the U.S. Bankruptcy Code, authorizing the transfer of the purchased assets to Food Lion.
It is the intent of Delhaize Group (Euronext Brussels: DELB – NYSE: DEG) to integrate the included BI-LO assets in the network of its wholly owned subsidiary Food Lion, LLC. Food Lion, LLC is a food retailer that has more than 1 300 stores in 11 U.S. states and has more than 74 000 associates.
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