May 9, 2007: by Elliot Zwiebach for Supermarket News — LOS ANGELES - Unified Western Grocers here said Monday it has signed a letter of understanding with Associated Grocers, Seattle, to purchase certain assets and assume certain liabilities of the Seattle-based cooperative.

The transaction is subject to completion of due diligence, execution of a definitive purchase agreement and approval by the boards of both companies, AG shareholders and federal and state regulatory agencies, but the companies said they expect to close on the transaction by late summer.

The purchase would make Unified a $4-billion-plus company — $3 billion in volume from Unified, $1.1 billion from AG — with distribution up and down the West Coast as well as in several Western states, Hawaii and other Pacific locales. Al Plamann, president and chief executive officer of Unified, said both organizations would benefit from the efficiencies and synergies that would result from the combination, and John Runyan, AG president and CEO, said the combination would create a very competitive grocery industry force for independents in the Western U.S."

AG announced last year it was deciding whether to sell, form a partnership with another company or simply reinvest in the existing company as part of an effort to find the best way to prepare its members for the future with a stable supply chain. Unified has been supplying AG's nonfood needs since late 2001.

Unified was created in September 1999 when Certified Grocers of Los Angeles and United Grocers, Portland, Ore., merged.