Grocery retailer and wholesaler Fresh Brands has announced today (Tuesday) that it has signed a definitive merger agreement to be acquired by an affiliate of the Chicago-based grocery wholesale cooperative, Certified Grocers Midwest, in a transaction valued at approximately US$100m, which includes assumed debt and certain other liabilities.

Under the terms of the merger agreement, each outstanding share of Fresh Brands’ common stock will be converted into the right to receive $7.05 in cash. Fresh Brands currently has 4,931,934 shares of common stock outstanding.

“We are very excited about combining our company with Certified in this transaction, which will greatly benefit all of our shareholders, franchisees, employees and vendors,” said Louis Stinebaugh, Fresh Brands’ president and chief operating officer. “We believe that this merger provides an opportunity for us to further lower our product costs, realize operating synergies and efficiencies, and deliver an even more effective value proposition to our franchisees and retail customers, while also providing us with greater financial support and flexibility to grow our business in the future,” said Stinebaugh.

“The acquisition of Fresh Brands provides many opportunities to strengthen both organizations,” said Ken Koester, president and chief executive officer of Certified. “Certified is looking forward to working with the associates of Fresh Brands because both organizations are dedicated to providing independent supermarket operators with excellent service at a low cost. We are owned by successful independent supermarket operators and believe that the enhanced buying power and other benefits of the merger will provide great value and opportunities to the Fresh Brands franchisees as well as the independent supermarket operators that we serve.”

The proposed merger is expected to be completed in the first quarter of 2006. The transaction is subject to approval by Fresh Brands’ shareholders and other customary closing conditions.