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Southern California-based Unified Western Grocers has signed a letter of agreement to acquire Associated Grocers of Seattle. Terms of the deal were not disclosed, is conditional on the successful completion of due diligence, and is expected to close by the end of the third quarter. When concluded, the deal will create an entity with more than $4 billion in annual sales.

"This transaction benefits both organizations," said Alfred A. Plamann, president/CEO of Unified Western Grocers. "Both companies are structured as cooperatives, both have a long history of successfully serving and supporting the growth of independent grocery
retailers throughout the Pacific Northwest and both organizations and their shareholders can greatly benefit from the efficiencies and synergies that will result from a combination of these two companies.”

John Runyan, president/CEO of Associated Grocers, said, "The changes and progress we have made in strengthening both retail and wholesale businesses will now be enhanced by bringing together the best of both companies. Combining AG's and Unified's strengths will create a very competitive grocery industry force for independents in the Western United States."

Since joining Associated almost two years ago, Runyan and his staff have been engaged in the process of evaluating the various strategic options available to the wholesaler. The company recently concluded a sale/leaseback of its headquarters and warehouse facilities as part of that process.
KC's View:
If this is indeed a move that strengthens the competitive position of independents on the west coast – and we have no reason to doubt it – then we applaud the move. And if one thing seems sure, it is that the estimable Runyan drove a hard and strong bargain for Associated Grocers.