FLEMING'S SCRIVNER DEAL DONE

ELLIOT ZWIEBACH

OKLAHOMA CITY -- Fleming Cos. here became the nation's largest wholesaler -- and its second-largest food distributor -- last week when it completed its acquisition of Scrivner, its former crosstown competitor. The agreement to acquire was announced June 1. Although Fleming executives said they expected to see immediate synergies, the total integration of the two firms would likely take about 18 months.

Robert E. Stauth, chairman, president and chief executive officer of Fleming, said eight Fleming or Scrivner distribution centers probably would be closed and consolidated during that period. The company has not determined which ones.

With last week's closing of the $1.085 billion deal, Jerry Metcalf, chairman and chief executive officer of Scrivner, and William T. Bishop, president and chief operating officer, both resigned,

Stauth told SN.

Metcalf also resigned as a co-chairman of the Joint Industry Executive Committee on Efficient Consumer Response, according to Stauth. That means the Food Marketing Institute and other trade associations will have to appoint a successor. FMI couldn't be reached for comment last week.

Metcalf said in a letter to Scrivner employees that he plans to open an office here to work on investments. He could not be reached for comment.

Bishop's plans were not immediately known. Stauth said, since Fleming planned to begin integration of the two companies immediately, there was "no place" for Metcalf and Bishop.

"We've talked with several industrial psychologists and specialists in mergers and acquisitions," he said, "and they said it's critical to have senior executives of the acquiring company in place and making decisions for the acquired company, if you're really interested in bringing the two businesses together."

The combination of Fleming and Scrivner -- formerly the nation's No. 2 and No. 3 wholesalers, behind Supervalu, Minneapolis -- gives the new Fleming annual sales of about $19 billion, second only to Kroger Co., Cincinnati, the nation's largest marketing and distribution company. Kroger had sales of $22.4 billion in 1993.

Fleming purchased Scrivner from Franz Haniel & Cie. of Germany. The acquisition puts Fleming into seven new markets and adds 186 corporate stores to Fleming's base of 129 corporate units, raising its corporate retail sales from 7% to 15% of total sales.

Stauth said Fleming has identified eight "opportunities" to decide whether to retain a Fleming or a Scrivner distribution center. He declined to name those facilities.

Fleming will announce each closing separately, he said, but in some instances, three or four obvious consolidations could come at about the same time. "We will move on those simultaneously, while several others might be less obvious to identify," he said.

Stauth estimated it will probably take 18 months to consolidate all eight locations, but speed is important to Fleming. Fleming also announced a number of personnel changes to accompany its integration effort.

E. Stephen Davis, Fleming's executive vice president of distribution, has moved across town to the former Scrivner offices to oversee the integration of the two companies, including personnel placement.

His job, Stauth said, will be to evaluate each executive -- those at Scrivner, as well as those at Fleming -- over the next three or four months "to try to bring together the best of all worlds.

"The key to growing earnings will be the depth of our reorganized senior management team and other associates who are committed to achieving greater results," he explained.

There will be no duplicate jobs, Stauth said, "so the question will be to determine who is most qualified within the current Fleming operating structure and, simultaneously, under the re-engineered Fleming structure that is being developed.

"Our goal is to strengthen each department. So if, for example, there are two vice presidents doing the same job at Fleming and Scrivner, we will determine which one is most qualified to remain a senior officer and which one will come back into the company, which will mean one or several people below them will fall out of the picture."

Gary Capshaw succeeds Davis in overseeing distribution. He retains his title as vice president of logistics and quality service.

Gerald G. Austin, executive vice president of operations, has been named to oversee implementation of re-engineered procedures as the two companies are combined. He also will retain his current duties, Stauth said.