Wal-Mart to sell McLane, Merit subsidiaries
May 1, 2003 12:00 PM
Wal-Mart Stores Inc has entered into an agreement for the sale of McLane Co Inc, a wholly owned subsidiary, to Berkshire Hathaway Inc. Bentonville AR-based Wal-Mart also has signed a letter of intent to sell Merit Distribution Services, a wholly owned subsidiary of McLane, to Swift Transportation Co, a Phoenix AZ-based national truckload carrier.
McLane, based in Temple TX, is one of the nation's largest wholesale distributors of groceries and nonfood items to convenience stores, drug stores, wholesale clubs, mass merchandisers, quick-service restaurants, and theaters. It was acquired by Wal-Mart in 1990.
“This transaction is positive for both Wal-Mart and McLane,” said Lee Scott, Wal-Mart's president and chief executive officer. “The sale will allow Wal-Mart to focus completely on its core retail business, and it will create expanded business opportunities for McLane.”
McLane's current management team will remain in place with business operations continuing as usual. The company will continue to be based in Temple.
Subject to regulatory approval, the sale is expected to occur by the end of June. After the acquisition, McLane will be a wholly owned subsidiary of Berkshire Hathaway.
The Merit transaction, subject to due diligence, is expected to be completed by the end of May. Swift's acquisition of Merit represents a $50 million transaction, according to the companies. A long-haul, over-the-road refrigerated carrier, Merit has been a wholly owned subsidiary of McLane since 1985.
Proceeds from the McLane and Merit transactions will total about $1.5 billion.
