Ahold agrees sale of two US chains
BI-LO and Bruno’s sold to Lone Star Funds
Ahold has agreed the $660m sale of its US retail businesses BI-LO and Bruno’s to US private investment company Lone Star Funds.
The deal, which is expected to complete in the the first quarter of 2005, is part of Ahold’s strategy to withdraw from non-core operations as the Netherlands-based supermarket giant drives a recovery from the financial problems which engulfted the business last year.
Ahold will receive $560m cash on completion, with another $100m depending upon BI-LO and Bruno’s achieving certain targets over the next 18 months.
BI-LO and Bruno’s are leading food retail chains in the Southeastern region of the United States with a combined store count of more than 450 supermarkets and combined 2003 net sales of approximately 4.7bn.
Ahold president and CEO Anders Moberg said: “This divestment comes at the end of a year of transition for Ahold and marks a major milestone along our Road to Recovery.
“Divesting BI-LO and Bruno’s is part of our strategy to optimize 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.”
Lone Star Funds, based in Texas, manages more than $13bn in assets and investments in North America, Europe and Asia. Ahold acquired BI-LO in 1977. and Bruno’s in 2001.
