This has been a busy year of mergers, acquisitions, divestitures, and more, and as we move toward August, Associated Wholesale Grocers, Inc. (AWG) and Affiliated Foods Midwest Cooperative, Inc. (AFM) are revealing that they have reached an agreement to combine the two distribution businesses. The members of both cooperatives going forward would be members of a larger AWG.
“This exciting endeavor is exactly what we need to allow our retailers to compete, grow and be profitable,” Martin Arter, President and CEO of AFM, shared. “The synergies between our joint cooperatives will help our retailers thrive. Our members benefit with a substantially lower cost of goods. Much credit is due to the vision of both AWG’s and AFM’s Board of Directors to see the possibilities of what we could become.”
Retailer-owned cooperative AWG’s supplying members operate over 3,000 stores in 30 states, according to a press release, while AFM is a retailer-owned cooperative supplying members that operate more than 800 stores across 15 states.
The President and CEO of AWG, David Smith, also responded to the great benefits that this merger will have for both companies, having said, “Expanding our collective distribution areas into several new adjoining states and adding over 800 new member stores will make our unified cooperatives stronger together, leveraging not only the additional scale and buying power but also employing and implementing the best practices of each that have been developed over the 80 to 90 years that our respective cooperatives have been in business. Combining our distribution center networks and support infrastructure will allow us to more effectively serve our growing numbers of independent member-retailers. This unified business will further strengthen our relationship with the vendor community, reduce operating expenses and subsequent cost of goods, and enhance our ability to support and serve our growing membership.”
The merger was unanimously approved by the board of directors of both AWG and AFM. While still subject to certain conditions, including the approval by AFM shareholders, it is expected to close in 2016.