A second-generation chief executive who was ousted from family business supermarket chain Market Basket in June has now bought out the cousin who removed him the top spot, in a $1.5 billion deal.
Completed on Wednesday evening, the deal brings to an end a more than two-decade long family feud that nearly crippled the firm.
Arthur T Demoulas’s side of the family now controls all of the business, after purchasing the 50.5% stake of Market Basket it did not own from cousin Arthur S Demoulas.
“Effective immediately, Arthur T Demoulas is returning to Market Basket with day-to-day operational authority of the company,” the Massachusetts-based firm said in a statement. “Our shared goal is to return Market Basket to the supermarket customers have come to rely upon.”
The deal will take months to complete and, until the contract is finalised, Arthur T will have to work alongside the chief executives that replaced him James Gooch and Felicia Thornton.
Arthur T managed to gain a strong following among employees for providing generous benefit schemes and above-average pay, which went against Arthur S’s desire to maximise shareholder profits.
Following Arthur T’s ousting a huge number of Market Basket employees staged protests urging the family business’s board to reinstate him as their boss.
Customers also boycotted the store, and it was reported that if Arthur S had not sold out, the company would have had to close the majority of its stores due to the intense stakeholder pressure.
Media reports have suggested that the grocery chain was losing up to $10 million a day, while Harvard professor John A Davis told CampdenFB in July that the only way for the company to move forward was for one side of the family to sell out.
Following news of the deal, employees and customers flocked to the supermarket’s headquarters in Tewksbury to celebrate.
The DeMoulas Saga
The company has operated under a cloud since 1971 with the death of one of the chain's founders, George DeMoulas.
Brother's Telemachus – "Mike" – and George DeMoulas took over their parent's small grocery store in 1954 and transformed the business into a chain of 15 stores. Following George's death, Mike was left as sole head of the business.
Each brother had agreed to provide for the other's family, but in 1990 George's heirs brought a lawsuit against Mike claiming he had cheated them out of all but 8% of the company's stock by dividing the chain's assets into a web of shell corporations and arguing these companies were separate from the main Market Basket company.
In 1994 a judge finally ruled Mike DeMoulas had defrauded his brother's family out of nearly $500 million and transferred 50.5% of Market Basket's stock to George's family.
Mike died on 2003 at the age of 82, but his heirs are making sure the family feud is kept alive and well. Mike's son, Arthur T DeMoulas, was elected chief executive of the company in 2008.
Despite the feud, Market Basket, founded initially as a small grocery store in 1917, has grown to have annual revenues of more than $4 billion and more than 21,000 employees.