Greenville, S.C.-based Bi-Lo has agreed to acquire and merge with Winn-Dixie stores, a deal valued at $560 million.
Bi-Lo, which announced the move Monday morning, has been trying to re-invent itself since exiting bankruptcy in spring 2010. The chain currently operates 207 supermarkets, including a dozen or so in the Charlotte market.
Jacksonville, Fla.-based Winn-Dixie is a larger chain by store count, with 480 retail stores. The chain was founded in 1925, and employs about 48,000 people.
The companies said Monday that they don't know where the combined company's headquarters will be located. They also said that they don't expect to close any stores, and that the combined company will operate 690 supermarkets with about 63,000 employees.
So does the deal mean the end of the Bi-Lo or Winn-Dixie brand? As of now, the companies are saying that they'll continue to operate both banners, with Winn-Dixie functioning as a privately-held, wholly-owned subsidiary.
Like Bi-Lo, Winn-Dixie is a legacy supermarket chain that struggled to find its way in the new era of Wal-Mart Supercenters and Whole Foods organic grocers. The company filed for bankruptcy in 2005, and though it has emerged, sales have continued to slump. Last year, Winn-Dixie announced it was closing 30 stores and laying off more than 2,000 workers as its troubles continued.
Bi-Lo was reported to be up for sale itself last year. The company was bought in 2005 by Lone Star Funds, a Dallas-baserd firm that specializes in buying up distressed companies. After coming out of bankruptcy, heavy-hitters Kroger and Publix were said to be interested in the chain, but nothing came of the talks.
Winn-Dixie shareholders still have to vote on the deal with Bi-Lo, which is expected to close in 60 to 120 days. They're unlikely to say no, as the $9.50-a-share price represents a 75 percent premium to Winn-Dixie stock's closing price on Friday.
Winn-Dixie's move "behind the curtain" into a private company will likely help it shed costs even more quickly. Winn-Dixie and Bi-Lo don't operate any overlapping stores, the companies said.
The new, nearly-700 store chain will have stores in the Carolinas, Florida, Alabama, Georgia, Tennessee, Louisiana and Mississippi. They'll be going head-to-head with Publix, Salisbury-based Food Lion and Charlotte-based Harris-Teeter.