Belgian supermarket group Delhaize has sold three of its six American chains to competitor Bi-Lo. The deal involves the smaller chains Sweetbay (72 locations), Harveys (72 locations) and Reid’s (11 locations), as well as ten former Sweetbay stores. The largest American chain in the portfolio, Food Lion, does remain with Delhaize.
Reid’s also sold
Reuters had already reported last week that Delhaize wanted to sell Harveys and Sweetbay, but the sale of Reid’s comes more as a surprise. The 165 shops, making some 1.8 billion dollar in turnover last year, earned Delhaize the sum 265 million dollar, about 200 million euro, in cash. Delhaize does retain the distribution centre of Sweetbay.
The buyer of the three chains is Bi-Lo, a chain that was on the shopping list of Delhaize in 2009. That deal fell through because Bi-Lo was in financial difficulties and was protected from its creditors through Chapter 11. The transaction will be completed in the last quarter of this year, if the governments involved give their permission.
“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”, said CEO Pierre-Olivier Beckers.
Delhaize will retain three American chains, amongst which its largest chain by far: Food Lion. Bottom dollar food and Hannaford also remain in Delhaize's hands. With about two thirds of the total group turnover, the US are - and remain - Delhaize's major market.