Etablissements Delhaize Fr (DEG), better known as Delhaize Group, recently signed an agreement with a private organization Tropic Group B.V. to sell its Bosnian & Herzegovinian stores. Tropic Group B.V. was founded by Bojan Risovic, who is known for his expertise in running retail enterprises.
Per the agreement, this Belgium-based international food retailer will divest all of its 39 Bosnian & Herzegovinian stores, as a part of its strategy to focus more on its core businesses in the region. The transaction is expected to be complete in the third quarter of 2014 following regulatory approval.
In February, Delhaize Group received an approval from the Federal Trade Commission to divest all of its U.S.-based Sweetbay, Harveys and Reid’s supermarket stores to another national supermarket chain, Bi-Lo Holdings, LLC. However, Delhaize Group will retain two stores and will convert them to the Food Lion banner. Bi-Lo Holdings, LLC, which is the parent company of BI-LO and Winn-Dixie supermarket chains, will thereafter divest 12 Delhaize America stores in the states of Florida, Georgia, and South Carolina out of all the acquired stores. The transaction to acquire the Sweetbay, Harveys and Reid’s supermarkets is expected to be complete by May 31, 2014.
The divestiture of stores to Bi-Lo Holdings, LLC was announced in May 2013, where Bi-Lo Holdings, LLC intended to buy Delhaize Group’s 72 Sweetbay stores, 72 Harveys stores and 11 Reid’s stores along with the leases for 10 prior Sweetbay locations for $265 million. In total, the national grocery chain will take control of over 165 stores and approximately 10,000 employees from Delhaize.
Other Stocks to Consider
Delhaize Group currently sports a Zacks Rank #2 (Buy). Some other stocks worth considering in the retail sector include Kroger Company (KR), Companhia Brasileira de Distribuicao (CBD) and Dunkin' Brands Group, Inc. (DNKN). All these stocks carry a Zacks Rank #2.
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