BI-LO, headquartered in Mauldin, SC, operates 287 stores inSouth Carolina, North Carolina, Georgia and Tennessee, and hasapproximately 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 StarFunds is private investment company that manages about $13 billionin assets and investments in North America, Europe and Asia.

At closing, expected during the first quarter of 2005, Aholdwill receive cash proceeds of $560 million, with a letter of creditfor an additional $100 million placed in escrow. Ahold will beentitled to receive all, some or none of the additional $100million within 18 months depending upon BI-LO and Bruno's achievingcertain targets relating to dispositions of inventory, real estateand other assets, according to the announcement. As part of theagreement, BI-LO and Bruno's will retain all of their debtobligations and other liabilities including capitalized leaseobligations; however, Ahold may be contingently liable underexisting guarantees for a portion of said capitalized leaseobligations.

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