Leading Belgian international food retailer, Etablissements Delhaize Fr , better known as Delhaize Group, recently entered into a definitive agreement to divest all of its U.S.-based Sweetbay, Harveys and Reid’s supermarket stores to another national supermarket chain, Bi-Lo Holdings, for $265 million in cash.
As per the agreement, the U.S.-based Bi-Lo Holdings will buy Delhaize Group’s 72 Sweetbay stores, 72 Harveys stores and 11 Reid’s stores along with the leases for 10 prior Sweetbay locations. In total, the national grocery chain will take control of over 165 stores (which generated around $1.8 billion in revenues in 2012) and approximately 10,000 employees from Delhaize Group. Hannaford and Sweetbay stores are located respectively throughout New England and Florida. Harveys stores are located primarily in Georgia and Florida.
The transaction, subject to some regulatory approvals, is expected to close in the fourth quarter of 2013. The divesture is expected to simplify the company’s U.S. operations and enable it to better focus on its core businesses in the region.
Bi-Lo Holdings is the parent company of the BI-LO and Winn-Dixie grocery store chains. It operates 686 grocery stores and 482 in-store pharmacies throughout eight southeastern states of the U.S.
Delhaize Group operates through food supermarkets. At the end of 2012, Delhaize Group operated companies in 10 countries on three continents: America, Europe and Asia. These companies have been grouped into three segments for the purposes of reporting: the United States, referred to as Delhaize America, Delhaize Belgium and Southeastern Europe & Asia. Delhaize Group operates a total network of 3,451 stores. Its American Depositary Receipts (ADRs), each representing one ordinary share, are listed on the New York Stock Exchange under the symbol “DEG.”
DEG carries a Zacks Rank #2 (Buy). Other companies in the retail/supermarket industry that are doing well are Harris Teeter Supermarkets, Inc. , The Kroger Co. (KR - Free Report) and Marks & Spencer Group plc (MAKSY - Free Report) , all carrying a Zacks Rank #2 (Buy).