urbanSTL

Keep in mind too that since Ralcorp's thwarting of ConAgra's takeover bid, ConAgra has grown larger through three big acquisitions this year: National Pretzel Co., Del Monte Canada and Tennessee Pride.

I wonder if the FTC would allow such a merger between ConAg and Ralcorp. ConAgra already owns everything - not really - but it has a lot brands and some of the biggest brands in America.

Also, with Ralcorp consolidating in St. Louis to save money in 2013 to the tune of between $26 and $31 million bucks, Ralcorp's stock can only go up. This is likely why Corvex is acting now. Ralcorp's stock is slumping now, but more efficiency at Ralcorp could make the stock more viable albeit in 2013.

Corvex, I think, would have less of an argument if Ralcorp is healthier in 2013.

Also, if William Stiritz can fight off Warren Buffet, Corvex should be a piece of cake.

It is likely the St. Louis headquarters will be gutted. ConAgra has a massive campus - with room to grow - in Omaha.

Alas, the list of major St. Louis-based food companies is shrinking. The consolation prize for St. Louis in all of this takeover mess is Post Foods - at least for now anyway.

Post Foods, which is nearly a billion dollar firm, could grow through acquisition and/or diversification.

Tweet from Brian S. @downtownstlbiz:

Ralcorp leases 175,000 sf at Bank of America Plaza (800 Market) and has 400-500 employees. Signed 57k lease expansion in 2012.

Practically speaking, what doe this mean for the city? What is the net loss in vibrancy and money and people etc. that will result? I guess the underlying question is how big was Ralcorp in our corporate landscape and presence in the city?

DogtownBnR wrote:Another Fortune 1000 company bites the dust, maybe two if you include Post. No matter what, this is not good for Downtown or St. Louis.

The loss is not good, but St. Louis has a resilient economy and despite the many corporate losses, St. Louis STILL has a strong corporate community. St. Louis will have about 18-20 F1000 firms still. Like any other city, it takes bumps and bruises, but St. Louis is fine. Post May, post A-B, post TWA etc. The region is still fine.

However, the region's corporate and political leadership should do more to explore how to nurture local businesses and get others firms to relocate to the St. Louis area - even if it is just a subsidiary.

In my opinion, the RCGA doesn't do enough to sell St. Louis' assets, location, natural beauty, cost of living, recreation etc.

What is the RCGA doing nowadays to stimulate and grow the region's economy?

DogtownBnR wrote:Slay is trying to save the St. Louis HQ. For some reason, I think this effort is about as fruitless as it was when he met with Carlos Brito, to consolidate INBEV's world HQ here in St. Louis. Unfortunately, I think this operation will be moved to Omaha, if not now, at some point in the future. They may stay here for a while, to keep experienced and knowledgable people on board,but over the long haul, there is no way they would keep an operation here, when they have that spawling campus in Omaha. Chalk this one up as another HQ loss, IMO!

http://www.stltoday.com/business/local/ ... 9f7a0.html

Unless the Feds say no, it's already a HQ's loss for St. Louis. As done in the past with other firms, it's just a matter of trying to gather/secure the remnants. ConAgra isn't leaving Omaha (Buffettown) especially considering he has a controlling interest in the company.

ConAgra has a large campus in a riverside office park near downtown Omaha. They might have some space that needs to be filled.

But I'm with you on this. I'm not so sure about the long-term. I hope Slay's effort pays off this time and on a sidebar.......Slay should try just as hard with local firms to get them to move downtown.

Ralcorp/ConAgra is on the hook for incentives already given by the city. Perhaps ConAgra will keep the subsidiary in St. Louis for a short time then realize that it would okay to keep it in St. Louis.

Also, Ralcorp has a big customer base in St. Louis with local grocers (Schnucks, Dierbergs and Save-A-Lot). This needs to be emphasized to the CEO. Glister-Mary Lee Corporation, another local private label firm, is right down the road.

ConAgra’s purchase of Ralcorp has been a long time coming…

The acquisition welcomes a whole new business segment to ConAgra: Ralcorp’s absolutely dominant position in private label & independently-branded products. When looking at the generic food markets, including private labels run by individual stores, most of these products have originated through Ralcorp’s operations. They have the product made, packaged under a customer’s private label (like Wal-Mart’s or Schnucks’s in-house label), and distributed to each customer. That way, the stores can offer their own in-house private label for what are essentially the same goods they also sell under national brands. More often than not, retailers recognize more revenues from selling their own in-house private label products than they do for big-name branded products, even though, for example, Schnucks-brand macaroni & cheese sells on retail shelves for less than a package of Kraft macaroni & cheese. (And sometimes, the big brand products and the private label products are the exact same basic product, whether food or otherwise, just packaged under different labels)

Meanwhile, ConAgra has a specialization in nationally-branded food products. These include Hunt’s, Healthy Choice, Marie Callender’s, Peter Pan, Jiffy Pop, Orville Redenbacher’s, Slim Jim’s, Blue Bonnett, Chef Boyardee, Crunch ‘n Munch, David’s Sunflower Seeds, Hebrew National, La Choy, Manwich, Ro*tel, Swiss Miss, Wesson, and Reddi-wip. For these and other products, their biggest competitors are Kellogg and Hershey, which have other brands with more market share.

This consolidation of major food processing companies will provide ConAgra with significant inroads into the private-label (generic) markets, increasing their revenues and allowing them to better compete with Kellogg and Hershey. Meanwhile, synergistic (hate that word) cost savings between these companies should provide much benefit to both the ConAgra branded business units and the Ralcorp private label segment.

And, ConAgra’s offer for Ralcorp is a significant increase to what was offered previously. Shareholders are going to be happy with the payoff. To paraphrase Captain Lonestar, they didn’t do this for money… they did this for a sh*t ton of money.

Note that Post has been a direct competitor with ConAgra for some time, before their acquisition by Ralcorp and since their spinoff last year. Post remains.

As for Saint Louis, specifically Downtown, I see a presence remaining for a while. Ralcorp had just signed long-term leases at the Bank of America Plaza building, for which it receives subsidies from the City for their original plans to not only sign 10 year leases but to also increase total employees Downtown by 100 in the relative near future. This provides incentives to remain in STL: Should ConAgra move the jobs to Omaha for directly, they’ll have to pay off these contracts (which they assume via acquisition) and pay back for any unfulfilled obligations which their acquired company had committed to. Add-in the politicians and local boosters, and I see STL job retention for a while, maybe even some short-term growth.

Meanwhile, the uniqueness of Ralcorp’s market segments, and related operations, are substantially different from those at ConAgra, which can be assumed to require continued specialization. Even if the whole of Ralcorp is moved to ConAgra’s Omaha Campus, it can be assumed that it will continue to operate as a separate business unit largely independent of their big brand units. Might as well keep this in STL for the time being.

It absolutely should be noted that Ralcorp’s executive leadership has really strived to keep the company in Saint Louis, and Downtown STL, for quite some time. Perhaps historical actions can help retain operations in STL.

That all said, I do see accretive job movement from Downtown STL to Omaha as the acquisition matures into a full merger. Even if the Ralcorp division remains separate from the primary ConAgra lines, I see jobs slowly moving to Omaha over the next ten years.

And bump bump bump (crash), another one bites the dust.