Grocers C&S Wholesale and SpartanNash Agree to Combine Operations
In a significant move for the grocery industry, C&S Wholesale Grocers LLC and SpartanNash have announced a merger agreement. The deal, expected to close in late 2025, is subject to certain conditions, including shareholder and regulatory approvals.
The combined company will collectively operate more than 200 corporate-run grocery stores and serve close to 10,000 independent retail locations. This merger aims to provide accessible, affordable nutrition and pharmacy services in local communities across the United States.
The combined entity will have nearly 60 complementary distribution centers, enhancing supply chain efficiency and potentially lowering costs due to improved operational scale and a wider distribution network. This could help independent grocers access a broader product range, enjoy more competitive pricing, and offer fresher inventory to consumers.
For consumers, the merger is anticipated to drive lower prices and better product availability, given the grocery industry's thin profit margins. The deal also preserves SpartanNash’s military commissary operations, safeguarding service members’ access to these stores.
However, concerns about diminishing competition often arise with consolidation in grocery wholesaling and retailing. While no direct negative impacts are stated in the current reports, regulatory approvals are still pending, indicating scrutiny over competition issues.
The purchase price for SpartanNash is $26.90 per share in cash, totaling $1.77 billion. BofA Securities Inc. is serving as exclusive financial advisor to SpartanNash, while Solomon Partners is acting as the exclusive financial advisor to C&S.
Sullivan & Cromwell LLP is acting as legal advisor to C&S in connection with its debt financing, and Cleary Gottlieb Steen & Hamilton LLP is serving as SpartanNash's legal advisor. Gibson, Dunn & Crutcher LLP is also acting as legal advisor to C&S.
Wells Fargo has provided a debt financing commitment for the deal. The transaction represents a 52.5% premium over SpartanNash's closing price on June 20 and a 42.0% premium to SpartanNash's 30-day volume-weighted average stock price as of June 20.
C&S Wholesale Grocers LLC, ranked No. 18 on The PG 100, Progressive Grocer's 2025 list of the top food and consumables retailers in North America, was part of a consortium of private investors acquiring Southeastern Grocers earlier this year. The deal has been unanimously approved by the boards of directors of both companies.
The merger is expected to have mixed impacts on the market, with regulatory bodies carefully reviewing the deal to mitigate any adverse impacts on competition. Yet, the potential benefits for independent grocers and consumers, such as improved supply chain efficiency, cost savings, and better product offerings, are promising.
- With the combined entity, private label products may experience larger-scale production due to the improved operational scale and expanded distribution network.
- Investors may perceive this merger as an attractive opportunity in the finance sector, given the positive premiums and financing commitments associated with the deal.
