Food Giant may merge with larger company

Business Today

SIKESTON -- Food Giant Supermarkets is currently in negotiations to be bought for stock by a Kentucky conglomerate. If all goes to plan, the Sikeston-based grocery retailer could be a subsidiary of Houchens Industries by early July.

Food Giant president and CEO Ron Watkins announced April 19 that after about 60 days of serious discussion, both companies' boards of directors had approved a nonbinding letter of intent outlining the acquisition of Food Giant by the Bowling Green, Ky.-based Houchens. If approved, the deal will be executed through an exchange of shares in stock. Both companies are completely employee-owned.

Houchens is the 106th largest privately owned company in the country according to Forbes Magazine. It operates supermarkets and convenience stores in Kentucky and Tennessee and over 200 limited-assortment grocery stores in 13 states. Houchens is also involved in cigarette retailing, manufacturing and marketing following its purchase of Commonwealth Brands cigarettes in 2001. Overall it employs about 7,800 people and boasts $1.9 billion in annual sales.

Food Giant owns and operates 90 Food Giant and Piggly Wiggly supermarkets in eight Midwestern states. The stores bring in about $400 million annually.

If the deal does go through, both parties emphasized that with a lack of competition and overlap between the two companies, there will be no changes in current stores, management or other personnel, including Food Giant's approximately 2,500 workers.

Kenneth Storey of Cape Girardeau founded Food Giant 35 years ago and built it from one store up. He sold the company to an employee stock ownership plan upon retiring March 1, 2000.