Newspaper article THE JOURNAL RECORD

Fleming to Purchase Scrivner

Newspaper article THE JOURNAL RECORD

Fleming to Purchase Scrivner

Article excerpt

Journal Record Staff Reporter

Food distribution giant Fleming Companies Inc. is about to get larger by buying crosstown rival Scrivner Inc., it was announced Wednesday.

Fleming, the number two food distribution company nationally, has signed a letter of intent to purchase all the outstanding Scrivner stock, creating a $19 billion company which will dominate the market.

Purchase price was $1.085 billion in cash. Fleming also will assume existing debt and acquisition-related transaction costs, according to a Fleming announcement.

Fleming plans to finance the cash deal through a syndication of banks, according to the announcement.

The purchase is expected to be nondillutive on Fleming stock and will not impact the company's regular dividend of $1.25, said President Robert E. Stauth.

Scrivner, the number three company in the industry in the U.S., had $6 billion in sales in 1993 while Fleming had sales of $13 billion. After consolidation, the new company is expected to have sales of $18.5 billion a "conservative figure because I don't believe we'll lose much business with the acquisition," Stauth said during a telephone press conference.

The telephone press conference was arranged because Stauth, who also is board chairman and chief executive officer, was in New York City filing documents with the New York Stock Exchange, the Securities and Exchange Commission and meeting with market analysts.

Both companies have headquarters and major distribution centers in Oklahoma City. Both distribution centers will continue operation because neither will be able to handle the larger volume of the combined company, Stauth said. Some consolidation of the headquarters functions is anticipated.

Together, the two companies have about 2,000 employees in Oklahoma City. Their long-term future has not been determined.

"We will embark upon a study to determine how best to combine the two offices," Stauth said. "This study is expected to take a long time and we will not make any announcements regarding employment until it is completed. People who are expecting a quick answer are going to be disappointed.

"Obviously there is some duplication and some synergism between the two. What we intend to find out is how best to combine the two to get the most benefit out of that synergism."

When consolidation is complete, the new company is expected to hold 11.5 percent of the national market, ahead of SuperValu of Minneapolis which now leads the market with a 9.6 percent share.

The proposed sale, initiated by Franz Haniel and Cie. GmbH, a privately held German company which owns Scrivner, is subject to regulatory and board approval of both companies.

No problems are anticipated. Closure of the sale is expected in late July or early August.

Some facilities are expected to close when consolidation is complete, but Stauth refused to speculate on which ones will be affected. Fleming owns 31 facilities while Scrivner owns 21. The new company, however, will have 44 facilities.

"That means that eight facilities will be closed," Stauth said. "Right now we don't know which ones that will be. We are making a study to determine that. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.