(RTTNews) - Belgian food retailer Delhaize Group (DEG: News ) Monday announced that it has signed a non-binding Letter of Intent with Mauldin, South Carolina-based food retailer BI-LO, LLC to acquire a substantial majority of BI-LO's assets, including associated inventory, for US$425 million in cash.

BI-LO currently operates 214 stores in North Carolina, South Carolina, Tennessee and Georgia and employs approximately 15 500 people. Delhaize said that it made the acquisition announcement in the context of BI-LO's bankruptcy proceedings in the United States Bankruptcy Court for the District of South Carolina.

On March 23, BI-LO and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The included BI-LO assets are estimated to have realized over US$2 billion in sales in 2008.

Delhaize said that the non-binding offer is subject to the satisfactory completion of the customary steps for such an acquisition including certain Bankruptcy Court approvals. The companies 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. This will authorize the transfer of the purchased assets to Delhaize's wholly owned subsidiary Food Lion, LLC. Delhaize said that it plans to integrate the included BI-LO assets in the network of Food Lion, a food retailer that has more than 1 300 stores in 11 U.S. states and has more than 74 000 associates.

Commenting on the transaction, Rick Anicetti, Executive Vice President of Delhaize Group and President and Chief Executive Officer of Food Lion, LLC said, "We at Food Lion, LLC have great admiration for the associates and stores at BI-LO. We believe our markets and service philosophy are complementary and we look forward to continuing our discussions with BI-LO."
Delhaize's sales network consisted of 2 684 stores at the end of the second quarter of 2009. In 2008, Delhaize reported net profit group share of EUR 467 million, or US$687 million, with revenues of EUR 19 billion, or US$28 billion. At the end of 2008, Delhaize employed approximately 141 000 people.

In early September, Delhaize announced the completion of the sale of its four stores operated in Germany to the German retail group Rewe. The companies had entered into the sale agreement in July. Delhaize, through its fully-owned subsidiary, Mega Image, also completed the acquisition of four stores operated under the banner Prodas Supermarket in Bucharest, the capital of Romania.

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