Kesko Food sells its shareholding in Rimi Baltic
Kesko Food Ltd and ICA Baltic AB, which belongs to the Swedish ICA Group, have signed an agreement that ICA Baltic acquires Kesko Food's 50% shareholding in Rimi Baltic AB. It has also been agreed that Rimi Baltic acquires the food trade properties in Estonia that are leased by it and owned by Fiesta Real Estate AS, an Estonian subsidiary of Kesko. The sales price for the shares is ¤190 million and for the properties ¤50 million. The capital gain from the transactions to Kesko is estimated to amount to approximately ¤155 million. The deals will take effect provided that the competition authorities grant the required permit and the other terms and conditions of the agreement are fulfilled.
Under the agreements Kesko will be released from the guarantees and other liabilities given on behalf of Rimi Baltic. In addition, Rimi Baltic will pay back to Kesko Food the loan of ¤24 million.
The plan is to use the proceeds to finance the international growth of the Kesko Group a.o. in Russia, as well as store network investments in Finland.
Kesko Food Ltd and ICA Baltic AB established, on a 50/50 basis, their joint venture Rimi Baltic AB in January 2005. The synergy benefits generated by the joint venture to Kesko's other business operations are small. In the future, Kesko will focus on developing businesses in which it has a majority shareholding.
Rimi Baltic is the second largest food retailer in the Baltic countries. The company's estimated net sales in 2006 will be about ¤970 million. For January-June 2006, Rimi Baltic made an operating loss of ¤6 million. Half of the company's net sales and operating result have been included in Kesko Food's income statement. Its impact on Kesko Food's operating profit excluding non-recurring items for the whole year 2006 will be minor. Rimi Baltic has a total of 200 stores in Estonia, Latvia and Lithuania, and it has approximately 9,000 employees.
Kesko is the most versatile provider of trading sector services in the Baltic Sea area. In close cooperation with retailers and other partners Kesko produces retail and wholesale services that are highly valued by customers. Kesko operates in Finland, Sweden, Norway, Estonia, Latvia, Lithuania and Russia.
For further information
President and CEO Matti Halmesmäki, Kesko Corporation, tel. +358 1053 22201
Corporate Executive Vice President Juhani Järvi, Kesko Corporation, tel. +358 1053 22209
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