Exhibit 99.1
News Release
For Immediate Release
May 31, 2000
DELHAIZE AMERICA AND HANNAFORD BROS. CO. SUBMIT DIVESTITURE PLAN TO FEDERAL
TRADE COMMISSION
Hannaford Bros. Co. to sell 38 locations to three supermarket retailers
(SALISBURY, N.C./SCARBOROUGH, ME)--Taking another step forward in the
regulatory approval process, Delhaize America, Inc. (NYSE: DZA, DZB) and
Hannaford Bros. Co. (NYSE: HRD) today announced the submittal of a divestiture
plan to the Federal Trade Commission for its consideration and approval. The
submission of the proposal is a required step for obtaining regulatory approval
of the acquisition of Hannaford by Delhaize America.
The divestiture plan includes agreements for the sale of 38 Hannaford stores in
Virginia and North Carolina. Twenty Virginia stores will be sold to an affiliate
of Cincinnati-based Kroger Co. Winston-Salem-based Lowe's Foods will purchase
twelve Hannaford stores and one site under construction in North Carolina.
Another five North Carolina stores will be sold to Richlands, N.C.-based
Sylvester/Floyd Group, which operates 26 Piggly Wiggly-affiliated supermarkets.
The three buyers will provide employment opportunities for store employees.
The divestiture sales are contingent on FTC approval of Delhaize America's
pending $3.6 billion merger with Hannaford. Hannaford and Delhaize America
believe their divestiture plan fully addresses the antitrust concerns identified
by the FTC staff in its review of the Hannaford transaction. Following a
favorable review of the divestiture plan, the acquisition will be reviewed by
the FTC Commissioners for their approval. Delhaize and Hannaford anticipate a
closing date on the Hannaford merger prior to August 1, 2000.
The combined companies that comprise DZA will generate sales of $15 billion and
garner synergies of $40 million for Delhaize America in the first year after the
Hannaford acquisition. The acquisition will fuel Delhaize America's future
growth and build long-term shareholder value, while positioning DZA as a premier
food retailer on the East Coast. The company will combine the strengths of
Hannaford with its existing Food Lion and Kash n' Karry banners to create a
company of strong cash flow, multiple banners, geographic diversity, and
complementary best practices.
The strategic acquisition will strengthen Delhaize America management, and the
savings and best practices identified by the company will benefit shareholders,
employees, and customers short-term as well as long-term. Hannaford is
strategically important to Delhaize America, as it gives Delhaize America a new,
strong growth vehicle, particularly in the Northeast where Hannaford operates
more than 100 stores and has plans to open more this year.
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News Release
May 31, 2000
Page 2
While the divestiture of these Hannaford stores was not the preferred outcome,
Delhaize America considered the entire range of divestiture possibilities in
valuing the Hannaford acquisition.
Hannaford stores in the Southeast had sales of $653 million in 1999,
constituting less than 5 percent of the projected $15 billion in consolidated
annual sales of the combined companies and less than 19 percent of Hannaford's
consolidated sales. Because the southeast division has historically posted
losses, the impact of the divestiture is not expected to be material to the
combined companies' results.
Hannaford is selling its Southeast stores to strong, committed operators with
considerable food retailing experience. That job opportunities be available for
Hannaford employees under the new owners was an important consideration for
Hannaford in making its decision.
Once the merger has been approved, Hannaford Bros. Co., which was founded in
Portland, Maine in 1883, will own and operate 104 supermarket and food and drug
combination stores in Maine, New Hampshire, Vermont, Massachusetts, and New
York. The company reported annual sales and other revenues of $3.4 billion in
1999. Its web site is www.hannaford.com.
Hannaford will become the third banner owned by Delhaize America, the parent
company of Salisbury, N.C.-based Food Lion and Tampa, FL-based Kash n' Karry,
which together generated sales of $10.9 billion in 1999. With more than 1,400
stores stretching from Maine to Florida, the combined companies will be the
fifth-largest grocery operator in the nation. For more information, visit the
Delhaize America website at www.delhaizeamerica.com.
This document contains forward-looking statements that involve uncertainties.
Factors that could cause results to differ materially from those in the
forward-looking statements are detailed from time to time in reports filed by
the Company with the SEC, including Forms 8-K, 10-Q and 10-K.
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For further information:
For Food Lion, Inc. For Hannaford Bros. Co.
Tawn Earnest (Media Relations) Caren Epstein (Media Relations)
704-633-8250, ext. 2185 207-885-3132
David Hogan (Investor Relations) Chuck Crockett (Investor Relations)
704-633-8250, ext 2529 207-885-2349
