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$1.77B Grocery Mega-Merger: SpartanNash & C&S Unite · Omni Talk Retail

• 0:00
  Spartan
• 0:00
  Ash
• 0:00
  is
• 0:00
  merging
• 0:01
  with
• 0:01
  CNS
• 0:02
  Wholesale
• 0:03
  Grocers.
• 0:03
  According
• 0:03
  to
• 0:04
  Progressive
• 0:04
  Grocer,
• 0:05
  CNS
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  Wholesale
• 0:06
  Grocers
• 0:06
  LLC
• 0:07
  and
• 0:07
  Spartan
• 0:07
  Ash
• 0:08
  Company
• 0:08
  have
• 0:08
  entered
• 0:08
  into
• 0:09
  a
• 0:09
  definitive
• 0:09
  merger
• 0:10
  agreement
• 0:11
  under
• 0:11
  which
• 0:11
  CNS
• 0:12
  will
• 0:12
  acquire
• 0:13
  Spartan
• 0:13
  Ash
• 0:13
  for
• 0:13
  a
• 0:14
  purchase
• 0:14
  price
• 0:14
  of
• 0:14
  $26.90
• 0:16
  per
• 0:17
  share
• 0:17
  of
• 0:18
  Spartan
• 0:18
  Nash
• 0:19
  common
• 0:19
  stock
• 0:20
  in
• 0:20
  cash,
• 0:20
  representing
• 0:21
  total
• 0:22
  consideration
• 0:23
  of
• 0:23
  1,77
• 0:24
  billion
• 0:25
  including
• 0:26
  assumed
• 0:26
  net
• 0:27
  debt.
• 0:27
  The
• 0:27
  transaction
• 0:28
  price
• 0:28
  represents
• 0:29
  a
• 0:29
  52.5%
• 0:30
  premium
• 0:31
  over
• 0:31
  Spart,
• 0:31
  Spartan
• 0:32
  Nash's
• 0:32
  closing
• 0:33
  price
• 0:33
  on
• 0:33
  June
• 0:34
  20.
• 0:34
  What
• 0:34
  do
• 0:35
  you
• 0:35
  think
• 0:35
  the
• 0:35
  rationale
• 0:36
  is
• 0:36
  behind
• 0:37
  the
• 0:37
  Spartan
• 0:37
  Nash
• 0:38
  and
• 0:38
  CNS
• 0:39
  merger?
• 0:40
  Man?
• 0:40
  I
• 0:40
  mean,
• 0:40
  for
• 0:41
  me,
• 0:41
  you
• 0:42
  know,
• 0:42
  I
• 0:42
  don't
• 0:42
  have
• 0:42
  too
• 0:42
  much
• 0:42
  to
• 0:43
  say
• 0:43
  on
• 0:43
  this
• 0:43
  topic,
• 0:43
  even
• 0:44
  though
• 0:44
  it's
• 0:44
  a
• 0:44
  big
• 0:44
  headline
• 0:44
  for
• 0:45
  the
• 0:45
  week.
• 0:45
  You
• 0:45
  know,
• 0:45
  probably
• 0:45
  the
• 0:45
  biggest
• 0:46
  one
• 0:46
  of
• 0:46
  the
• 0:46
  week
• 0:46
  without
• 0:46
  a
• 0:47
  doubt
• 0:47
  is,
• 0:47
  I
• 0:47
  mean
• 0:47
  it's
• 0:48
  gotta
• 0:48
  be
• 0:48
  scale.
• 0:48
  It's
• 0:49
  gotta
• 0:49
  be
• 0:49
  the
• 0:49
  rationale.
• 0:50
  There's
• 0:50
  always
• 0:50
  strength
• 0:50
  in
• 0:50
  numbers.
• 0:52
  The
• 0:52
  grocery
• 0:52
  business
• 0:52
  continues
• 0:53
  to
• 0:53
  feel
• 0:53
  pressure
• 0:54
  on
• 0:54
  all
• 0:54
  sides.
• 0:55
  You
• 0:55
  have
• 0:55
  two
• 0:56
  entities
• 0:56
  basically
• 0:56
  with
• 0:57
  similar
• 0:57
  value
• 0:57
  propositions,
• 0:58
  both
• 0:58
  being
• 0:58
  wholesalers.
• 0:59
  And
• 0:59
  so,
• 1:00
  you
• 1:00
  know,
• 1:00
  there's
• 1:00
  going
• 1:00
  to
• 1:01
  be
• 1:01
  operational
• 1:01
  synergies
• 1:02
  from
• 1:02
  this.
• 1:02
  This
• 1:02
  isn't
• 1:03
  like
• 1:03
  your
• 1:03
  TYP
• 1:04
  merger
• 1:04
  acquisition
• 1:05
  where
• 1:05
  you
• 1:05
  kind
• 1:05
  of
• 1:05
  have
• 1:05
  to
• 1:05
  jump
• 1:06
  through
• 1:06
  a
• 1:06
  lot
• 1:06
  of
• 1:06
  hoops
• 1:06
  to
• 1:07
  find
• 1:07
  out
• 1:07
  where
• 1:07
  the
• 1:07
  value
• 1:08
  is.
• 1:08
  So
• 1:09
  I
• 1:09
  mean
• 1:09
  the
• 1:09
  number,
• 1:10
  it's
• 1:10
  telling
• 1:10
  you
• 1:10
  the
• 1:10
  numbers.
• 1:11
  I
• 1:11
  want
• 1:11
  to
• 1:11
  make
• 1:11
  sure
• 1:11
  I
• 1:11
  get
• 1:11
  this
• 1:12
  right.
• 1:12
  In
• 1:12
  the
• 1:12
  article
• 1:12
  it
• 1:12
  said
• 1:12
  that
• 1:13
  they've
• 1:13
  got
• 1:13
  approximately
• 1:14
  10.
• 1:14
  They
• 1:15
  will
• 1:15
  service
• 1:15
  approximately
• 1:16
  10,000
• 1:17
  retail
• 1:17
  locations.
• 1:18
  So
• 1:18
  that's
• 1:18
  a
• 1:19
  pretty
• 1:19
  big
• 1:19
  operation
• 1:20
  at
• 1:20
  this
• 1:20
  stage
• 1:21
  in
• 1:21
  the
• 1:21
  game.
• 1:21
  And
• 1:21
  the
• 1:22
  wholesale
• 1:22
  game
• 1:22
  is
• 1:22
  all
• 1:23
  about
• 1:23
  price
• 1:23
  and
• 1:23
  the
• 1:24
  level
• 1:24
  of
• 1:24
  service
• 1:24
  that
• 1:24
  you
• 1:25
  can
• 1:25
  provide.
• 1:26
  So
• 1:26
  the
• 1:26
  deal
• 1:27
  net
• 1:27
  net
• 1:27
  should
• 1:28
  be
• 1:28
  able
• 1:28
  to
• 1:28
  provide
• 1:28
  CNS
• 1:29
  and,
• 1:30
  and
• 1:30
  Spartan
• 1:30
  Nash's
• 1:31
  customers
• 1:31
  with
• 1:32
  better
• 1:32
  prices
• 1:32
  and
• 1:33
  hopefully
• 1:33
  better
• 1:34
  operational
• 1:35
  execution
• 1:35
  over
• 1:35
  time
• 1:35
  too.
• 1:36
  So
• 1:36
  that's,
• 1:36
  that's
• 1:36
  my
• 1:37
  take.
• 1:37
  It's
• 1:37
  just
• 1:37
  purely
• 1:37
  about
• 1:37
  scale.
• 1:38
  Yeah.
• 1:38
  What
• 1:38
  do
• 1:38
  you
• 1:38
  think
• 1:38
  though?
• 1:39
  I
• 1:39
  think
• 1:39
  that
• 1:39
  the.
• 1:40
  They've
• 1:40
  got
• 1:40
  to
• 1:40
  be.
• 1:41
  Both
• 1:41
  Spartan
• 1:42
  Nash
• 1:42
  and
• 1:42
  CNS
• 1:43
  have
• 1:43
  got
• 1:43
  to
• 1:43
  be
• 1:44
  facing
• 1:44
  increasing
• 1:45
  pressure
• 1:45
  from
• 1:46
  the
• 1:46
  regional
• 1:46
  and
• 1:46
  independent
• 1:47
  grocery
• 1:47
  stores
• 1:48
  that
• 1:48
  they
• 1:48
  support
• 1:49
  because
• 1:50
  those
• 1:50
  regionals
• 1:51
  are
• 1:51
  not
• 1:52
  able
• 1:52
  to
• 1:52
  withstand
• 1:53
  things
• 1:53
  like
• 1:54
  tariffs,
• 1:54
  things
• 1:55
  like
• 1:55
  constantly
• 1:55
  fluctuating
• 1:56
  prices.
• 1:57
  The
• 1:57
  way
• 1:57
  that
• 1:58
  some
• 1:58
  of
• 1:58
  the
• 1:58
  larger
• 1:59
  players
• 1:59
  in
• 1:59
  their
• 1:59
  same
• 2:00
  markets,
• 2:00
  the
• 2:00
  larger
• 2:01
  competitors
• 2:01
  like
• 2:01
  a
• 2:01
  Walmart
• 2:02
  or
• 2:02
  like
• 2:03
  Albertsons
• 2:03
  Kroger,
• 2:04
  they
• 2:05
  don't
• 2:05
  have
• 2:05
  those
• 2:05
  advantages.
• 2:06
  And
• 2:06
  so
• 2:06
  for
• 2:07
  them
• 2:07
  to
• 2:07
  stay
• 2:07
  competitive,
• 2:08
  these
• 2:08
  independent
• 2:09
  and
• 2:09
  regional
• 2:09
  grocers,
• 2:10
  they're
• 2:10
  going
• 2:10
  to
• 2:11
  need
• 2:11
  to
• 2:11
  gain
• 2:12
  efficiencies
• 2:13
  and
• 2:14
  lower
• 2:14
  costs
• 2:15
  wherever
• 2:15
  they
• 2:15
  can.
• 2:15
  So
• 2:16
  I
• 2:16
  think
• 2:16
  that's
• 2:16
  really
• 2:17
  what's
• 2:17
  probably
• 2:18
  driving
• 2:18
  this.
• 2:20
  And
• 2:20
  I
• 2:20
  just,
• 2:20
  I
• 2:21
  hope
• 2:21
  that
• 2:21
  it's
• 2:22
  as
• 2:22
  written
• 2:22
  that
• 2:23
  that
• 2:23
  this
• 2:23
  is
• 2:23
  really
• 2:24
  doing
• 2:24
  just
• 2:24
  that
• 2:25
  that's
• 2:25
  helping
• 2:25
  bring
• 2:26
  down
• 2:26
  prices
• 2:27
  for
• 2:27
  those
• 2:27
  independent
• 2:28
  grocers
• 2:28
  and
• 2:28
  their
• 2:29
  customers
• 2:30
  and
• 2:30
  that
• 2:30
  this
• 2:30
  will
• 2:30
  work
• 2:31
  as
• 2:31
  planned.
• 2:32
  Yeah,
• 2:32
  it's
• 2:33
  a
• 2:33
  great
• 2:33
  point.
• 2:33
  Now,
• 2:33
  to
• 2:34
  your
• 2:34
  I
• 2:34
  think
• 2:34
  what
• 2:35
  you're
• 2:35
  implicitly
• 2:36
  saying
• 2:36
  there,
• 2:36
  too,
• 2:36
  is
• 2:37
  like,
• 2:37
  does
• 2:37
  it
• 2:37
  stave
• 2:37
  off
• 2:38
  the
• 2:38
  continued
• 2:38
  grab
• 2:39
  of
• 2:39
  share
• 2:39
  by
• 2:39
  the
• 2:40
  big
• 2:40
  guys
• 2:40
  from
• 2:40
  the
• 2:40
  regional
• 2:41
  grocers?
• 2:42
  Time
• 2:42
  will
• 2:42
  tell.
• 2:42
  It's
• 2:43
  a
• 2:43
  big
• 2:43
  question.
• 2:43
  But
• 2:43
  the
• 2:43
  other
• 2:43
  thing
• 2:44
  about
• 2:44
  the
• 2:44
  regional
• 2:44
  grocers
• 2:45
  is
• 2:45
  they
• 2:45
  don't
• 2:45
  have
• 2:45
  the
• 2:46
  ability
• 2:46
  to
• 2:46
  go
• 2:46
  direct
• 2:47
  with
• 2:47
  their
• 2:47
  own
• 2:47
  distribution
• 2:48
  like
• 2:48
  the
• 2:48
  big
• 2:48
  guys
• 2:49
  do.
• 2:49
  So,
• 2:49
  you
• 2:49
  know,
• 2:50
  they
• 2:50
  need
• 2:50
  companies
• 2:50
  like
• 2:51
  CNS
• 2:51
  and
• 2:51
  Spartan
• 2:52
  Nash
• 2:52
  to
• 2:53
  thrive
• 2:53
  and
• 2:53
  survive.
• 2:54
  So,
• 2:54
  you
• 2:54
  know,
• 2:54
  hopefully
• 2:54
  this
• 2:55
  makes
• 2:55
  sense.