GRAND RAPIDS, Mich., July 22 (UPI) -- U.S. regional grocery chain Spartan Stores Inc. said Monday it had agreed to a merger with Nash Finch Co., a food distributor.
The two firms said they had agreed to an all-stock merger valued at about $1.3 billion, including existing net debt at each company.
The combine company will have 22 distribution centers and 177 retail outlets in 37 states.
Under the terms of the deal, Nash Finch shareholders will receive a fixed ratio of 1.20 shares of Spartan Stores common stock for each share of Nash Finch common stock they own, the companies said.
After the closing, Spartan Stores shareholders will own 57.7 percent of the company. Nash Finch shareholders will own about 42.3 percent, the companies said.
"This transformational transaction provides a unique opportunity to bring together Spartan Stores' grocery distribution and retail operations in Michigan, Indiana and Ohio with Nash Finch's leading position in grocery distribution to military commissaries and exchanges and its complementary wholesale grocery network throughout the United States," said Dennis Eidson, president and chief executive officer of Spartan Stores.
Eidson will continue to hold the same job titles with the new company, while Alec Covington, CEO and president of Nash Finch, will remain in an advisory capacity "to ensure a smooth transition," the companies said in a statement.
Spartan Stores has its headquarters in Grand Rapids, Mich., while Nash Finch has its head offices in Minneapolis. Both office setups will be retained and Nash Finch will continue to run its military food distribution from its division headquarters in Norfolk, Va.
Edward Brunot will continue to runt the military distribution business.
Spartan Stores board Chairman Craig Sturken will serve as chairman of the merged company, which expects to save $50 million in operating expenses in the first year after closure.