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Ahold announced its intention to divest its Bi-Lo and Bruno's subsidiaries in the Southeast US, as a part of its "strategy to optimize its portfolio and to strengthen its financial position by reducing debt." It hopes to complete the sale this year.

The company said that once the divestitures take place, it would "focus its efforts on its remaining U.S. food retail operations, including Stop & Shop, Giant-Landover, Giant-Carlisle, Tops, and Peapod, positioning those companies for growth."

It was just last week that Ahold announced that it would be consolidating its Giant-Landover management with Stop & Shop's, moving the Washington, DC's operations to Boston; it already has been combining Top's management functions with those of Giant-Carlisle.

Anders Moberg, Ahold President & CEO said, "We believe that Bi-Lo and Bruno's are both powerful brands and will have a bright future under new ownership. We hope to identify buyers whose strategic priorities include further strengthening these businesses to succeed in a competitive but fast-growing marketplace.''

Ahold USA President and CEO, Bill Grize said, "We are confident that this decision will position Bi-Lo and Bruno's for long-term growth in their respective markets, with the intent of creating more value for associates and customers.''

South Carolina-based Bi-Lo was acquired by Ahold in 1977, while Alabama-based Bruno's was bought by the Dutch company in 2001.
KC's View:
First of all, let us say with some degree of pride that in an email to MNB that was posted a few days ago, one member of our community predicted this move. (Do we have great people or what?)

That said, we're have to say that we're amused by Moberg's and Grize's comments about how this move is good for Bi-Lo and Bruno's. It, in fact, may be good for those two chains, but that's not why they are being divested. They’re being divested because Ahold has gotten itself into a vat-load full of trouble because the company’s previous management, led by Cees van der Hoeven, allowed a culture to fester there that allowed financial irregularities to flourish to the tune of a billion-dollar accounting scandal.

By the way, a Dutch shareholders group asked a court there to start an investigation into actions taken by the management of retailer Ahold during the period 2000 and 2003.

The shame is that Ahold was building something here in the US, and it wasn't that long ago that the sky seemed to be the limit. What it was building is now being dismantled. Whether this is a good or bad move for competition will depend on what company acquires Bi-Lo and Bruno's.