BI-LO, headquartered in Mauldin, SC, operates 287 stores in South Carolina, North Carolina, Georgia and Tennessee, and has approximately 23,000 employees. Bruno's, based in Birmingham, AL, operates 168 stores in Alabama, Florida, Georgia and Mississippi, and employs approximately 11,500 individuals. The two chains' combined 2003 net sales were approximately $6.3 billion. Lone Star Funds is private investment company that manages about $13 billion in assets and investments in North America, Europe and Asia.

At closing, expected during the first quarter of 2005, Ahold will receive cash proceeds of $560 million, with a letter of credit for an additional $100 million placed in escrow. Ahold will be entitled to receive all, some or none of the additional $100 million within 18 months depending upon BI-LO and Bruno's achieving certain targets relating to dispositions of inventory, real estate and other assets, according to the announcement. As part of the agreement, BI-LO and Bruno's will retain all of their debt obligations and other liabilities including capitalized lease obligations; however, Ahold may be contingently liable under existing guarantees for a portion of said capitalized lease obligations.

Ahold president/CEO Anders Moberg says the divestiture is part of a strategy "to optimize our portfolio and strengthen our financial position by reducing debt." Ahold's US retail business now "will be fully focused on our other prominent supermarket operations, Stop & Shop/Giant-Landover and Giant-Carlisle/Tops," Moberg says in a prepared statement. "Our 'Road to Recovery' is on track," he concludes.