Bi-Lo LLC and Winn-Dixie Stores Inc. have agreed to merge in a deal that stands to create a food and drug chain of nearly 690 stores in eight southeastern states.

BI-LO, Winn-Dixie Stores, supermarket chain, merger, Southeast, Randall Onstead, Peter Lynch, in-store pharmacies, food and drug chain

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Bi-Lo set to merge with Winn-Dixie

December 19th, 2011

GREENVILLE, S.C. – Bi-Lo LLC and Winn-Dixie Stores Inc. have agreed to merge in a deal that stands to create a food and drug chain of nearly 690 stores in eight southeastern states.

Under the merger agreement announced Monday, Bi-Lo plans to acquire all outstanding shares of Winn-Dixie stock for about $560 million. The move will take Jacksonville, Fla.-based Winn-Dixie private.

The Winn-Dixie board unanimously approved the agreement. The transaction is slated to close in the next 60 to 120 days, pending approval from Winn-Dixie shareholders and other closing conditions.

Bi-Lo currently operates 207 supermarkets, including approximately 116 in-store pharmacies, in North Carolina, South Carolina, Georgia and Tennessee, and employs approximately 17,000 people. Winn-Dixie operates about 480 supermarkets, including 380 in-store pharmacies, in Florida, Alabama, Louisiana, Georgia and Mississippi, and employs approximately 46,000 people.

Winn-Dixie is the nation's 23rd-largest retail pharmacy operator by pharmacy dollar sales, estimated at about $790 million, and the 21st-largest by pharmacy count, according to Chain Drug Review's 2011 Annual Report of Retail Pharmacy. Bi-Lo is the 40th-largest retail pharmacy chain by Rx dollar sales, estimated at about $314 million, and pharmacy count.

“With no overlap in our markets, the combined company will have a perfect geographic fit that will create a stronger platform to provide customers great products at a great value while continuing to offer exceptional service,’’ Bi-Lo chairman Randall Onstead said in a statement. “Bi-Lo and Winn-Dixie are strong regional brands with similar heritages, compelling customer connections and outstanding employees.’’

Following completion of the merger, the companies are expected to continue to operate under the Bi-Lo and Winn-Dixie banners.

“This transaction with Bi-Lo provides Winn-Dixie shareholders with a significant cash premium for their shares,” stated Peter Lynch, chairman, president and chief executive officer of Winn-Dixie. “We believe this transaction is in the best interests of our shareholders. By combining Bi-Lo and Winn-Dixie, we anticipate building a company that is stronger than our individual businesses and creating opportunities for continued advancement through the cross-pollination of our people and the sharing of ideas across our organizations.’’

Executives said they do not currently expect any store closures as a result of the combination. A combined executive management team structure and headquarters location will be determined as the transaction approaches finalization, but the combined company is expected to maintain a presence in both Greenville, S.C., where Bi-Lo is based, and in Jacksonville.