OCR Text |
Show - Thursday. Sun Advocate. Price. Utah May 22. 1997 IB Fred Meyer to merge with Smith's Food and Drug, Inc. The theory behind the merger of Fred Meyer Inc. and Smith's Food & Drug Centers Inc. is that it will give the combined company greater purchasing power - and that could mean lower prices for customers. This merger of equals will , create a merchandising powerhouse across the western United States, said Robert Miller, chairman and chief executive of Fred Meyer. Ralphs Grocery Co. in southern California. Yucaipas managing partner is Ronald Burkle, Smiths chief executive who acquired a stake in the Salt Lake company last year. He will be chairman of the holding company. . This is the reason behind this kind of strategic merger the purchasing power and cost efficiencies," said Shelley Thomas, a Smiths spokeswoman. Smiths, based in Salt Lake To survive youre going to City, serves mostly mountain have to have big purchasing and southwestern states while power, said Donald Spindel, Fred Meyer, based in Portland, an analyst with A.G. Edwards has stores that sell groceries and in St. Louis. Generally speak- general merchandise in the Paing, size is becoming more and cific northwest and mountain states. Fred Meyer also owns more important. The idea is that the more jewelry and specialty stores. clout and purchasing power you The chains compete in just two have, the better deals you can states, Utah and Idaho. The combined company will get from your suppliers and the better prices you can pass on to eqjoy strong market positions your customers, said Mark in the five fastest growing cit-- Purles of Associated Food ies and seven of the fastest Stores in Salt Lake City. Thats what the two companies get by merging into a holding company based in Portland. The $2 billion deal announced Monday involves Fred Meyers acquiring Smiths through' a stock swap valued at about $720 million and the assumption of $1.3 billion of Smiths growing states in the country, Miller said. He will relinquish the chairmans job but will be chief executive of the new company. In addition to the greater purchasing power, there will be cost efficiencies. For instance, Fred Meyer, a relatively new player in the Salt Lake market, has been buying debt. Both chains will retain their merchandise from a third party. names and operate indepen- Now, it can buy from Smiths, dently, but together theyll have which has an distribution cen374 stores, 45,000 employees ters in Utah, Spindel said. The companies said they exand about $7 billion in revenue this year. The company will op- pect to save $40 million a year on administrative, distribution erate from Alaska to Texas. and warehousing, and another The merged company, however, will have the purchasing $25 million by refinancing debt. Fred Meyer has a stronger power of a $15 billion retailer through its affiliation with The balance sheet than Smiths, which should enable it to refiYucaipa Companies, a California-based investment company nance debt at lower rates, that has a stake in such grocery Spindel said. The deal is expected to be chains as Dominicks Finer Foods Inc. in Chicago and completed by the end of the summer, pending approval by shareholders and regulatory clearance. Under terms of the agreement, approved by the boards of directors of both companies. Smiths shareholders will receive 1.05 shares of Fred Meyer common stock for each share of Smiths common stock. Based on the closing price of Fred Meyer stock on Friday, the Smiths stock would be worth $43.97 per share. Much ofSmiths stock is held in a few hands. The survivors of Dee Smith, who founded the company in 1948 in Brigham City, control 65 percent of the voting stock of the company. The University of Utah owns nearly 15 percent and The Church of Jesus Christ of Latter- Saints owns 13 percent of the voting stock. Fred Meyer was founded 75 years ago by the late Fred G. Meyer, who was an early prop shopping, ponent of combining a grocery store with hardware, clothing and other items, all under one roof. Smiths had 1996 revenues of $2.89 billion, while Fred Meyer reported $3.72 billion. Thomas said that although Fred Meyer is acquiring Smiths, Nobody put a bearhug on us. This is a merger of , -day Black Diamond royalty selected last weekend Three local women were selected to reign over the Black Diamond Stampede comPictured from left, secing up June ond attendant Lacey Thayn, queen Kendra Gunter and first attendant Tabitha Lott. The 10-2- 1. one-sto- equals. , girls were selected following competition in speaking, modeling, impromptu questioning, horseback riding and written testing. The competition took place last Sunday at the Carbon County fairgrounds. Utah Department ofHealth reports no whole blood shortages in state No news is good news when four spots on the holding company board, and the companys chief executive - Burkle - will be the chairman, i After the merger, no single shareholder is expected to own more than 10 percent of Fred Meyer. Health began monitoring the supply there have been no shortages reported. DOH got involved after the United States Food and Drug Administration revoked Intermountain Health Cares license to collect blood on April 25. IHC had been providing 80 percent Smiths stock closed up $3.75 at $43.75 per share and Fred of Utahs whole blood. The comMeyer's closed up 75 cents at pany hopes to resume opera$42.62 on the New York Stock tions after resolving FDAs Exchange on Monday. re! V for donors or for specific blood types. Remaining collection and dis- tribution centers have Since the Utah Department of panded their efforts. We Smiths principals will have it comes to whole blood in Utah. exap- preciate how' well they have come through. Im really proud of the many Utahns who tinue to donate blood, said Rod Betit, executive director. Blood is a vital resource no manufactured. Only people can supply blood for each other. Whole blood has a shelf life of 2 from days. Generally, a The best way to prevent a pint of blood donated today will shortage is for Utahns to con- be used within 10 days. tinue to donate regularly. All Many adults who weigh at blood types are needed - espe- least 110 pounds can donate 35-4- and cially Should there be a shortage, the DOH will issue a general call blood. Giving blood is safe. No disease can be contracted by donating blood. i w Access Hie Universe with lllahLiNK You can take a trip to distant galaxies or the classroom next door. Its all part of UtahZjYAr Utahs public education electronic resource and Internet connection. Through XJtahLINK, you can visit the worlds great libraries classes with teachers or hold on-line and students throughout the state. Study great art, chat with astronauts, access Utah approved lesson plans. The possibilities are endless. o o o o o o -- And, we dont just leave it at that. Theres training...lots of it. That way teachers can put educational technology to good use...teaching our children the best of our world. Visit our web site at www.uen.org. o o Schools: For help in configuring hardware and software, call the rxr o o qOOOO 89q o O rxr o o oo XJtahLINK Help Desk o at 585-744- 0 or 0 on. CJch Edatcilen A partnership ofpubtic and higher education, KUED-TV7- 7, UtahUNK. I. k with substitute. It cannot be tf KULC-TW- 9, " EDNET. and |