Delhaize Group Becomes a Leading Retailer in Southeastern Europe through Acquisition of Serbian Delta Maxi Group
BRUSSELS, Belgium - March 3, 2011 - Delhaize Group (Euronext Brussels: DELB -
NYSE: DEG), the Belgian international food retailer, announced today that it has
entered into an agreement to acquire 100% of the retail company Delta Maxi
Group, operating approximately 450 stores in five countries in Southeastern
Europe. Combined with its existing operations in Greece and Romania, the
acquisition of Delta Maxi Group will make Delhaize Group a leading retailer in
Southeastern Europe. We expect the acquisition, including transaction costs, to
be immediately earnings accretive as of 2011.
"We are very excited about this transaction that fully supports the acceleration
of our sales growth rate, a key priority of our New Game Plan. Delta Maxi Group
is a strong retailer built very dynamically in five countries in Southeastern
Europe, a region that Delhaize Group has thus far focused on with Alfa Beta in
Greece and Mega Image in Romania," commented Pierre-Olivier Beckers, President
and Chief Executive Officer of Delhaize Group. "We foresee significant revenue
growth and synergies potential from integrating these new markets in our
existing European business. The Southeast of Europe continues to be a very
promising region in terms of economic and consumer spending growth, both
supporting the roll-out of modern retailing. In 2011, we will be well positioned
to capture these growth opportunities as our operations in seven Southeastern
European countries together are expected to generate revenues of approximately
EUR 3.4 billion and to cover a network of more than 800 stores. This transaction
is an important step in rebalancing our geographic portfolio between our U.S,
European and Asian operations."
Kostas Macheras, Executive Vice President of Delhaize Group and Chief Executive
Officer of Southeastern Europe said: "We have a lot of respect for what Delta
Maxi Group has achieved over the last decade. We are particularly impressed with
the strength of the brands of Delta Maxi Group, the level of execution and
innovation in the stores, the breadth of the store network and the talent of
Delta Maxi management teams. We are excited that strong management teams and
associates will soon join Delhaize Group. Delta Maxi's millions of customers can
count on us to continue the first class service they have been enjoying in their
favorite stores. Additionally, Delta Maxi Group customers will be able to
benefit from our operating companies' expertise in assortment and
merchandising."
Delta Maxi Group began operations in 2000 and is headquartered in Belgrade,
Serbia. Today, the group operates more than 450 stores in Serbia, Bulgaria,
Bosnia and Herzegovina, Montenegro and Albania. In Serbia, Delta Maxi operates
approximately 350 stores and is the largest food retailer. Also in Bulgaria,
Bosnia and Herzegovina, Albania and Montenegro Delta Maxi Group holds important
positions.
The Delta Maxi Group network consists primarily of 4 food retail formats,
ranging from convenience stores (under the banners Mini Maxi, Piccadilly Express
and Euromax), supermarkets (under the banners Maxi, Piccadilly and Euromax),
discount stores (Tempo Express) and hypermarkets (Tempo). Estimated annual
revenues of Delta Maxi Group for 2011 amount to EUR 1.35 to 1.4 billion and
estimated 2011 EBITDA amounts to EUR 85 to 90 million. Delta Maxi Group employs
approximately 15 000 associates across its markets.
Under the terms of the agreement Delhaize Group will acquire 100% of Delta Maxi
Group at closing for a purchase price of EUR 932.5 million including net debt of
approximately EUR 300 million. This results in an acquisition multiple,
excluding the positive effect of planned synergies, of 0.67x to 0.69x 2011
expected revenues and of 10.4x to 11.0x 2011 expected EBITDA. We expect the
acquisition, including transaction costs, to be immediately earnings accretive
as of 2011. The transaction includes the real estate ownership of more than half
of the stores in Serbia and seven of the distribution centers of Delta Maxi
Group.
As from the end of 2013, Delhaize Group plans to realize more than EUR 16
million net annual synergies, particularly from improved procurement, better
inventory management and optimized IT and supply chain systems and processes.
The acquisition of Delta Maxi Group is subject to mutually agreed upon and
customary conditions, including the approval by the merger control authorities
in Serbia, Bulgaria, Montenegro and Albania. The transaction is expected to
close in the third quarter of 2011.
Delhaize Group has retained Lazard, Bank of America Merrill Lynch and
Raffeisenbank as financial advisors for this transaction. CMS in Brussels,
London and Serbia, with assistance from other CMS offices and other local
lawyers, is acting as legal advisor to Delhaize Group.
» Delhaize Group
Delhaize Group is a Belgian international food retailer present in six countries
on three continents. At the end of 2010, Delhaize Group's sales network
consisted of 2 800 stores. In 2010, Delhaize Group posted EUR 20.8 billion (USD
27.6 billion) in revenues. In 2009, Delhaize Group posted EUR 514 million (USD
717 million) in net profit (Group share). At the end of 2010, Delhaize Group
employed approximately 137 000 people. Delhaize Group's stock is listed on
Euronext Brussels (DELB) and the New York Stock Exchange (DEG).
This press release is available in English, French and Dutch. You can also find
it on the website http://www.delhaizegroup.com. Questions can be sent to
investor@delhaizegroup.com.
» Contacts
Guy Elewaut: + 32 2 412 29 48
Geert Verellen: + 32 2 412 83 62
Aurélie Bultynck: + 32 2 412 83 61
Steven Vandenbroeke (media): + 32 2 412 86 69
Amy Shue (U.S. investors): +1 704 633 8250 (ext.2529)
Milica Stojiljkovic (Serbian media - McCann Erickson Public Relations):
+381 63 384 186
cautionary note regarding forward looking statements
Statements that are included or incorporated by reference in this press release
and other written and oral statements made from time to time by Delhaize Group
and its representatives, other than statements of historical fact, which address
activities, events and developments that Delhaize Group expects or anticipates
will or may occur in the future, including, without limitation, statements about
the acquisition of Delta Maxi Group, the expected closing time of the
acquisition, the effect of such acquisition on the credit rating of Delhaize
Group, the synergies from the acquisition, the future revenue and EBITDA of
Delta Maxi Group, strategic options, future strategies and the anticipated
benefits of these strategies, are "forward-looking statements" within the
meaning of the U.S. federal securities laws that are subject to risks and
uncertainties. These forward-looking statements generally can be identified as
statements that include phrases such as "guidance," "outlook," "projected,"
"believe," "target," "predict," "estimate," "forecast," "strategy," "may,"
"goal," "expect," "anticipate," "intend," "plan," "foresee," "likely," "will,"
"should" or other similar words or phrases. Although such statements are based
on current information, actual outcomes and results may differ materially from
those projected depending upon a variety of factors, including, but not limited
to, failure to obtain approval of antitrust authorities, failure of mutually
agreed closing conditions to be satisfied, failure to obtain synergies on the
timeline predicted or at all, covenant restrictions under credit facilities that
might be in place at the time of the acquisition of Delta Maxi group, changes in
the general economy or the markets of Delhaize Group, in consumer spending, in
inflation or currency exchange rates or in legislation or regulation;
competitive factors; adverse determination with respect to claims; inability to
timely develop, remodel, integrate or convert stores; and supply or quality
control problems with vendors. Additional risks and uncertainties that could
cause actual results to differ materially from those stated or implied by such
forward-looking statements are described in Delhaize Group's most recent Annual
Report on Form 20-F and other filings made by Delhaize Group with the U.S.
Securities and Exchange Commission, which risk factors are incorporated herein
by reference. Delhaize Group disclaims any obligation to update developments of
these risk factors or to announce publicly any revision to any of the forward-
looking statements contained in this release, or to make corrections to reflect
future events or developments.
Press release in pdf format:
http://hugin.info/133961/R/1493999/429729.pdf
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Source: Delhaize Group via Thomson Reuters ONE
[HUG#1493999]