A popular chain of grocery stores based in Michigan known as Spartan Stores recently announced plans to merge with Nash Finch, an out-of-state grocery distributor, in a $1.3 billion deal, an estimated value that includes approximately $312 million in stock of both firms' net debts.
Both companies' executive boards voted unanimously in favor of the merger, agreeing to grant 1.2 shares of Spartan Stores stock for each Nash Finch stock held by that firm's shareholders. Once the deal is finalized, Nash Finch shareholders will own about 42.3 percent of the combined company, while Spartan Stores shareholders will control the remaining 57.7 percent. The makeup of the company's board of directors will determined using a similar ratio; Nash Finch will contribute 5 members to the 12-person board, while Spartan Stores will designate 7 of those seats, including the chairman.
The Michigan-based Spartan Stores currently operate 101 stores under a variety of names, such as Valu Land and Family Fare, but the combined company will own 177 locations and 22 distribution facilities serving 37 total states. This will make it the U.S.'s largest food supplier to military exchanges and commissaries. Both firms say the merger will help them penetrate new markets and significantly expand their customer base by combining Nash Finch's extensive distribution network with Spartan Stores' strong retail presence in Michigan and surrounding states, benefits they claim will be forwarded to shareholders and stores in the form of value-added distribution services.
An executive with Nash Finch said the merger represents another step in the company's goal to become the United States' most prominent and respected food distributor. He noted that the companies compliment each other extremely well and will enjoy an "outstanding strategic fit." Spartan Stores' CEO agreed with this assertion, explaining that the combined company will make use of a "hybrid business model" combining distribution, wholesale and standard retail to thrive in the ever-changing grocery market. Attorneys well versed in mergers and acquisitions will work diligently to serve the interests of both grocery giants.
Source: MLive, "Spartan Stores announces merger with Nash Finch in $1.3 billion deal" Shandra Martinez, Jul. 22, 2013
