Mergers

Last week might well have been called national merger week. Three projects of the first magnitude were set in motion, involving nearly half a billion dollars.

Food Products. Close on the heels of Baker William B. Ward, who last fortnight incorporated a two-billion-dollar bakery company (TIME, Feb. 8), a group of Manhattan capitalists and food merchants filed articles of incorporation in Baltimore for a $200,000,000 holding company called the National Food Products Corporation. Of two million shares of stock, 370,000 were to be offered to the public at $45 by a syndicate headed by Chandler & Co., Inc., and Charle D. Robbins & Co.

The announcement stated: "The new corporation will purchase, own, sell, and underwrite securities of concerns engaged in the food trade. Its income will be derived from dividends of stocks owned, from profits on purchase and sale of securities, and from underwriting and other banking activities." In a word, the type of control already applied to public utilities, oil and bread is now to be experimented with in the largest industry in the country, the industry that feeds the people.

The U. S. spends 22 billions for food annually. About 365,000 retail stores sell to the housewife, of which 40,000 are chain stores. The chain systems will be the first annexed by National Food Products. Already the new corporation claims an investment of $4,500,000, but not control, in 12 systems operating 2,000 stores in 20 states. Among these chains: the H. C. Bohack Co. (300 stores, chiefly in Brooklyn); James Butler Inc.; Borden Milk Co.; U. S. Stores Corporation (1,050 grocery and meat stores in 12 states); David Pender Grocery Co. (Virginia); First National Stores, Inc. (Boston); U. S. Dairy Products Corporation; Reid Ice Cream Corporation; Abbotts-Alderney Dairies, Inc. (Philadelphia); Detroit Creamery Co. Packing plants and bakeries will be added to this list.

Another food products merger is in progress, headed by the Postum Cereal Co. Having absorbed the Jell-O Co. (dessert jellies) some weeks ago for 80 millions, and an Indiana cake-flour concern more recently, the Postum Co. last week acquired the California Packing Co. for 92 millions and announced that it was but beginning a series of operations which would make that figure and the Postum organazition itself mere drops in the bucket. Wall Street took seriously the thought that there would eventually be a combine between the Postum-made merger and National Food Products. Among companies mentioned for the combination was the Shredded Wheat Co., successful breakfast concern.

Oil. Blair & Co., Inc., and the Chase Securities Corporation were authors of a transaction which if executed entirely in cash, will fall only a million short of the record-setting Dodge buy by Dillon, Read & Co. They took over a block of nearly 300,000 shares (55%) of the Associated Oil Co., second in rank only to the Standard Oil Co. of California on the Pacific coast. The price agreed on was $59 cash, or $145,000,000 if all stockholders demanded cash instead of exchange securities, about $165,000,000 if exchange alone was made. Associated Oil, owned by Pacific Oil until the latter's merger with Standard Oil of California, had been an object of great interest to half a dozen bidders, including the Tide Water Oil Co.

Associated Oil has a daily output of approximately 60,000 bbl.; has its own refining and distributing systems; is regarded as one of the soundest, best coordinated units in the industry. The new purchasers are known to be interested in several other companies, and their schemes for further consolidation, if successful, will result in a corporation as powerful as any in the country.