Aldi to acquire Winn-Dixie and Harveys Supermarket

Aldi will add about 400 stores in the Southeast U.S. through the planned acquisition of Winn-Dixie and Harveys Supermarket, the company said Aug. 16.

An undetermined number of stores will be converted to the Aldi banner, the company said, with the balance continuing to operate under the Winn-Dixie and Harveys Supermarket banners.

The discount chain announced it has entered into a definitive agreement to acquire Winn-Dixie and Harveys Supermarket as part of a larger divestiture of Southeastern Grocers to various entities, according to a news release.

The acquisition continues the growth of ALDI, expanding its ability to serve the region with great products at the lowest possible prices, according to Aldi executives.

"Like ALDI, Winn-Dixie and Harveys Supermarket have long histories and many loyal customers in the Southeast and we look forward to serving them in the years to come,” Aldi CEO Jason Hart said in the release. "The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills. The transaction supports our long-term growth strategy across the United States, including plans to add 120 new stores nationwide this year to reach a total of more than 2,400 stores by year-end."

Though many retailers are closing stores due to economic conditions, Aldi is “doubling down” on expansion plans, the release said.

The Southeast-focused acquisition includes approximately 400 Winn-Dixie and Harveys Supermarket locations throughout Alabama, Florida, Georgia, Louisiana and Mississippi, according to the release.

"This merger agreement is a testament to our successful transformational journey and the tireless work of our dedicated associates who serve our communities," Anthony Hucker, president and CEO of Southeastern Grocers, said in the release. "Aldi shares our vision to provide exceptional quality, service and value — and this unique opportunity will evolve our business to benefit our customers, associates and neighbors throughout the Southeast."

Aldi first established its presence in the Southeast in the mid-1990s and since has invested $2.5 billion in the region, the release said. In January, Aldi opened its 26th regional headquarters and distribution center in Loxley, Ala., to help support new stores, with plans to open 20 new Aldi locations in the area by the end of the year.

Southeastern Grocers established its presence in the region nearly a century ago. From the beginning, its commitments to the customer, caring associates and quality products have made a profound impact in the Southeast, according to the release.   

"Aldi will operate Winn-Dixie and Harveys Supermarket stores with the same level of care and focus on quality and service, as we also evaluate which locations will convert to the Aldi format to better support the neighborhoods we'll now have the privilege of serving," Aldi's Hart said. "For those stores we do not convert, our intention is that these continue to operate as Winn-Dixie and Harveys Supermarket stores."

Deutsche Bank served as financial advisor to Aldi, the release said. Baker & McKenzie LLP was transaction counsel to Aldi, and Kayne Law Group served as real estate counsel to Aldi.  

The transaction is expected to close in the first half of 2024, subject to regulatory approval and other customary closing conditions, according to the release.

Concurrently, Southeastern Grocers Inc. said in a release that it has agreed to divest its Fresco y Más operations. SEG anticipates that the sale of the Fresco y Más banner will be consummated in the first quarter of 2024. The Fresco y Más banner, including all 28 stores and four pharmacies, will be sold to Fresco Retail Group LLC, an investment group strategically focused on food and grocery. Fresco Retail Group LLC plans for all stores and pharmacies in the Fresco y Más banner to continue operating as they are presently, according to the release.

The merger agreement has been approved by the holders of a majority of SEG’s outstanding shares, and the merger is expected to close in the first half of 2024, subject to regulatory approvals and customary closing conditions. SEG will continue to operate its respective banners and stores in the normal course of business up to and until the transactions are completed, the release said.

RBC Capital Markets LLC served as financial advisor to SEG. Willkie Farr & Gallagher LLP was transaction counsel and Kirkland & Ellis LLP served as antitrust counsel to SEG.