Exclusive Breaking News: Cornell & Diehl to Merge with Laudisi

[group4]

Rich, I think it's being called a merger because that's how it was announced.

 

[mso489]

Anyone know if, under the ownership arrangement, C&D offers any access to their blending floor,

like a tour or a quick look-see? Do they have any sales arrangement in their home town Morganton?

I'm headed down there tomorrow on other business, but from their web site, it looks like it's not

an opportunity for a visit nor a tobacco purchase. Be nice to pick up some bulk, being that close.

 

[woodsroad]

You might want to swing by after hours and check out their dumpster.

 

[peckinpahhombre]

There is no magic to the term "merger" and I am not sure what some of you think it means. Most acquisitions in the US are accomplished through the legal mechanism of a "merger" even when google acquires a $1 million upstart tech company. Commonly, the acquirer forms a shell subsidiary which merges with and into the target with the shares held by the target shareholders being converted into shares of the acquirer and/or cash. So the term merger, as a legal matter, doesn't tell you anything about which group of shareholders (those of the target or those of the acquirer) control the combined entity after the merger has been completed.

 

[tedswearingen]

It's a merger and not an acquisition. I know the semantics can be dicey. See HERE. This best describes the situation at hand.
Woodsroad, the idea that Laudisi would outsource production of C&D tins to another factory is interesting. Fortunately, that's simply not going to be the case. Laudisi didn't just buy the C&D name, we brought on the factory and all of it's employees up in Morganton, NC.
As far as C&D prices going up at SPC? A lot of blenders raised their prices this year. A lot of blenders raise their prices every year at the new year. McClelland and 4th Generation come to mind off the top of my head as two lines that have already increased their prices besides C&D. What you're seeing is SPC reacting more quickly than some other retailers to reflect on its site the Minimum Advertised Pricing (MAP) determined by the distributor.

 

[swilford]

Guys,
As an addendum to what Ted said:
It's a merger because Chris and Patty, the owners of C&D before January 1st, are now shareholders in the larger, combined company. Yes, Laudisi was the surviving corporation in a legal sense, being the larger of the two, but the difference between a buyout/takeover/etc and what we did is that Chris and Patty now own part of Laudisi. Hence, merger, not buyout/takeover/etc.
As for prices, before the merger, Chris had planned a price increase for the beginning of 2014. He hadn't had one since 2012. We also (specifically, Chris, Brandon, Keith and I) tried to simplify the price structure, taking a bunch of different categories and collapse them into fewer. That led to some price increases and some price drops as we removed pricing tiers.
With the exception of a handful of things (notably Pease 16oz tins, which did have to go up quite a bit, and Autumn Evening Bulk, which went down a lot), stuff just didn't move all that much.
Sykes

 

[swilford]

Oh, and yes, C&D still does factory tours. Just call them if you want to arrange it. Contact info for them is on www.cornellanddiehl.com
Sykes

 

[woodsroad]

Thanks, Ted and Sykes.
I guess that so many of us see C&D for the rare and fragile gem that it is. What they do is so highly unique. Only a few other companies in the world can compare to C&D, and none of them are any where near as adventurous with their blends. And they make a LOT of blends. They are dedicated to tobacco. Without that devotion and without the passion of it's owners and workers, it's just another factory.
Change is inevitable and healthy, I just don't want to see it change for the worse.