Mark Sanchez: This is the day this deal, $2.2 billion deal announced back in the summer between Steelcase and HNI Corporation. The company, formerly known as HON was about the number four, number five player in the industry for many years at a time when Steelcase was number one. And shareholders at both corporations the other day approved their $2.2 billion deal. HNI is buying Steelcase. This deal is supposed to close today. HNI will own Steelcase. And this is really the end of an era. This is Steelcase. This is one of those iconic corporations in Grand Rapids right up there with Amway, Meijer, Haworth, you know, name some of those other big-time corporations that have helped put this town on the map. This is no longer going to be your father's Steelcase or your grandparents Steelcase. This is a company that for generations provided a lot of good jobs for a lot of people in this town. It's changing. Steelcase as we know it is done and it's now going to kind of operate as a brand, as a division of HNI Corporation. We'll see how it all plays out.
There is some apprehension out there as there is always a little anxiety and apprehension whenever you see a merger or the sale of a corporation, a homegrown company. What's it going to mean for jobs, investments, presence in the community, community involvement, and all those things that Steelcase has been known for for so many years. And all that's yet to be seen.
It's not unusual to see some administrative consolidations, know, that term synergies that's often used in the M&A world, but all that's yet to come. We'll see how it plays out. But for now, you're right, Patrick, today is the day and Steelcase Inc. is a different corporation now.
Patrick Center: So, for shareholders, who is getting what?
Mark Sanchez: Some folks think it's a good deal. There were some challenges, but bottom line, Steelcase shareholders will get $7.20 in cash and fractional shares, .219 shares of HNI common stock for each share they own. And then the HNI board will also expand from 10 directors to 12 to include a couple of folks from Steelcase's board of directors. And again, HNI plans to operate Steelcase as a brand and Steelcase's headquarters will remain in Grand Rapids. But as you said earlier, the question now is at what level? Are there to be some administrative efficiencies, administrative cuts for those professional jobs where you have redundancies? It's not unusual, but we haven't seen or heard anything about that yet.
Patrick Center: Overwhelming support. However, I believe there is one shareholder who is suing in this case.
Mark Sanchez: There was a case and that is typical whenever you see any large corporate merger, there's you know, there are law firms out there that automatically put out these appeals for anybody that wants to challenge. Anybody wants…doesn't like the terms and they say they're investigating. They're going to challenge it. Those cases usually come and go pretty quickly and get dismissed.
Again, you had a massive plus 90 plus percent of shareholders from both corporations supported this merger and this deal. So yeah, that's I don't want to say normal, but you see it quite often in corporate mergers or somebody will just either file a case or threaten to file a case to try to get a better deal.
Patrick Center: We’re talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. The Right Place held its 2026 Economic Outlook. What is The Right Place projecting as we head into the new year?
Mark Sanchez: Well, this came out of The Right Place Inc’s Annual Outlook the other day here in Grand Rapids. I don't know, I guess the best way to say it is steady as she goes. You know, Randy Thelen at The Right Place spoke and he said basically, 2025 is not a great year, but a good year, a decent year. And yes, there's a lot of uncertainty out there about the economy and what it's going to do in 2026, especially with the impacts of tariffs and interest rates.
And usually at these events, and he spoke again, Jeff Korzenik, he's a chief economist at Fifth Third Bank. And he talked about there's some optimism out there that businesses do have the ability to adapt and if you're in business, adaptability is one of the key things you better have. And he predicted ‘26 will be a better year as tariff uncertainty fades and there's favorable tax treatment. Interest rates, we'll see what happens again with the Fed this week, but interest rates are kind of on a downward trend and he termed it, Jeff Korsanik, a pretty good formula for rising capital expenditures.
Overall, he thinks there's about a 60 to 70 percent probability that the U.S. will avoid a recession. Although there are certainly potential obstacles in the way, including labor hoarding, we're seeing a few more layoffs now than we have seen in recent years. So overall, you know, it looks okay, but we all know the factors are out there that we've been dealing with for a little bit of time. But the outlook was, again, I'll go to what Randy Thelen was saying, not great, but a good year in 2025 and 2026 looks maybe about the same. We do have that lingering uncertainty with tariffs and the effects that will have in interest rates, but the general consensus is we'll be okay.
Patrick Center: You mentioned tariffs, you mentioned the interest rates. They touched on AI and its impacts.
Mark Sanchez: Yeah, this is the force, you know, that's here, it's coming, it's affecting every single economic sector across the economy. And I kind of liken it to think back 30 years ago, uh boy, mid 90s, early 90s, when this thing called the World Wide Web emerged and companies started adapting and how they use it for marketing, for operations, for promotion, for selling, for everything. Well, now we have artificial intelligence that's really emerging as a major force. Companies need to adapt. We're seeing major investments in AI. The panelists were basically saying that is going to be a key issue in 2026 on how well companies are adapting, how well they are adopting and integrating it into their operations.
Patrick Center: Michigan State University making an investment, a huge investment, $1 billion into an athletics capital campaign. Acrisure's CEO and wife is making a large donation to support this campaign.
Mark Sanchez: Yeah, s Sparty through marriage and family, but this is a big deal. You know, last week MSU announced this billion dollar for Sparta capital initiative. And a couple of days later we see Greg Williams and his wife, Dawn. Greg is the founder, chair, CEO of Acrisure. They made a $401 million commitment to Michigan State University, primarily aimed at athletics. It is the single largest donation in MSU history and one of the largest donations in college sports in the U.S.
When Greg spoke last week at the press conference where they announced this donation, he made it very clear this is a commitment from him and Dawn. This is not coming from Acrisure. He made it very clear to draw that distinction, but it's a massive donation to Michigan State for the Spartans and about $290 million of it will go to support MSU athletics and hey, for all Spartan fans, we'd like to see MSU's athletics, especially each fall, do a little better. Basketball's doing okay, but the other big sport has a ways to go.
It's a big deal. Support athletics, there's another $100 million that's going to go to what's called Spartan Ventures. It's a new nonprofit tax-exempt organization, and it's a subsidiary foundation that's going to focus on fundraising and generating revenue for athletics and the name, image, and likeness opportunities for the college athletes.
And then there's outside athletics, another $11 million that's going to go toward academic and extracurricular initiatives, if I can say that. And that's going to include the MSU Burgess Institute for Entrepreneurship and Innovation, Risk Management and Financial Insurance Program, and Eli Broad College of Business. And then a little bit of money for the Spartan Marching Band and Pep Bands, and of course, the Sparty Mascot Program. And the interesting part of this is, you know, in Lansing, East Lansing, that is a big hub for the insurance industry in Michigan. And just like any economic sector out there, the insurance industry needs talent. So, some of this money will go to support this program at MSU to prepare the next generation of talent for the insurance industry.
Patrick Center: Crain’s Grand Rapids Business staff writer, Mark Sanchez, thank you so much.
Mark Sanchez: Thank you, Patrick.