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Spartan Stores, Nash Finch Merge to Become Larger Grocer y Wholesale Distributor

Spartan Stores, Inc., Byron Township, Mich., and Nash Finch Co., Edina, Minn., completed their merger and will use the corporate name of SpartanNash Co., with the official name change to SpartanNash expected to become effective at the annual shareholders meeting in May 2014. The combined company will continue to conduct business as Spartan Stores, Nash Finch and MDV in their respective markets.

"This merger brings together two highly complementary organizations to form a leader in the grocery wholesale, retail and military commissary and exchange channels," says Dennis Eidson, president and CEO of Spartan Stores. "We would like to thank all of our stakeholders, including our shareholders, associates, customers and suppliers, for their support in completing this significant achievement. We look forward to leveraging our new platform with its broader customer base and geographic reach to create significant long-term value for our shareholders."

Under the terms of the merger agreement, each share of Nash Finch common stock was converted into 1.20 shares of Spartan Stores common stock. Former Spartan Stores shareholders own approximately 57.7% of the equity of the combined company and former Nash Finch shareholders own approximately 42.3%. The combined company has approximately 38 million shares outstanding.

SpartanNash's board of directors includes seven directors from Spartan Stores' previous board and four directors from Nash Finch's previous board. In addition to Craig Sturken, who will serve as chairman of the board of directors and Eidson, the other members include M. Shan Atkins, Frank M. Gambino, Yvonne R. Jackson, Elizabeth A. Nickels and Timothy J. O'Donovan, former members of the board of directors of Spartan Stores and William R. Voss, Mickey P. Foret, Douglas A. Hacker and Hawthorne L. Proctor, former members of the board of directors of Nash Finch.

Along with completing the merger, SpartanNash has changed its fiscal year end from the last Saturday in March to the Saturday closest to Dec. 31. This date change results in a transition period with a 15-week third quarter this year vs. a 16-week third quarter last year and a 39-week fiscal year ending Dec. 28 vs. a 52-week fiscal year ending March 30. Approximately six weeks of Nash Finch's sales and earnings contributions will be included in Spartan's third quarter and fiscal year results.

SpartanNash expects that the transaction will create cost synergies of approximately $20 million, $35 million and $52 million in fiscal years 2014, 2015 and 2016, respectively. Integration and transaction closing related costs of approximately $17-18 million will be recorded in the quarter ended Dec. 28. Integration costs of $10-11 million, $4-5 million and $1-2 million are expected to be incurred in fiscal years 2014, 2015 and 2016, respectively. The transaction is expected to be accretive to earnings per share, excluding the one-time integration and transaction costs, in fiscal 2014 which will end on Jan. 3, 2015. The combined company also expects to consistently continue to return value to shareholders through a dividend, which will initially be set at $0.48 per share on an annualized basis.

Additionally, SpartanNash’s corporate headquarters will be located in Grand Rapids, Mich., will retain a strong regional presence in Minneapolis to support food distribution and in Norfolk, Va., to support military operations.

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