KESKO CORPORATION STOCK EXCHANGE RELEASE 11.04.2017 AT 14.30 1(3)
CORRECTION: CHANGE OF RELEASE CATEGORY. Kesko to sell its K-maatalous business to Lantmännen
Kesko Corporation has signed an agreement to sell its K-maatalous business to the Swedish Lantmännen ek för. The debt free price of the sale, structured as a share transaction, is €38.5 million.
In 2016, the net sales of the K-maatalous business operations agreed to be sold were €334 million and operating profit was €5.3 million. The debt free price of the sale, structured as a share transaction, is €38.5 million and will be paid in cash in connection with the completion of the transaction. As the transaction is completed, Kesko Corporation will record a profit of €13 million on the disposal. The operations being sold have 45 employees. The operations of the 78 K-maatalous chain stores are managed by 43 local retailer entrepreneurs, who will continue operating under the retailer business model with Lantmännen.
In 2016, the K-maatalous chain's retail sales were €424 million. K-maatalous' customers include agricultural entrepreneurs, machinery contractors, and equestrian professionals and enthusiasts. K-maatalous' product selection includes seeds, fertilisers, animal feeds and plant protection products.
"The structure of agriculture in Finland has changed significantly. The change continues and the number of farms continues to decrease. At the same time, the agricultural trade is becoming increasingly international and concentrated. As part of Lantmännen, the position of K-maatalous and the K-maatalous retailers in the agricultural trade will strengthen and their competitiveness in a tightening operating environment will improve. In line with its strategy, Kesko will be an increasingly focused company in the future and concentrate on the Finnish grocery trade, the building and technical trade and the car trade," says Kesko's President and CEO Mikko Helander.
Lantmännen is a Swedish agricultural cooperative and Northern Europe's leading operator in the sector. Lantmännen's net sales are approximately €3.9 billion, it has 10,000 employees and operations in over 20 countries. Lantmännen is owned by 25,000 Swedish farmers.
"Lantmännen acquires K-Maatalous in order to grow and further develop its position in the grain value chain in the Baltic Sea region. The acquisition is an important part of the implementation of Lantmännen's Baltic Sea strategy. It gives Lantmännen an opportunity for continued growth and development in our Eastern neighbouring country, where Lantmännen already has large holdings primarily in the baking and malt industries," says Per Olof Nyman, Group President and CEO, Lantmännen.
The completion of the transaction is subject to the approval of the competition authorities and the fulfilment of the other terms and conditions of the transaction. The transaction is expected to be completed no later than the third quarter of 2017.
Briefing on 12 April 2017 at 15.30
Kesko and Lantmännen will hold a briefing on Wednesday, 12 April 2017 at 15.30 at Kesko's agricultural and machinery trade offices, Vanha Porvoontie 245, Vantaa.
Antti Meriläinen, Senior Vice President, Kesko's agricultural and machinery trade, firstname.lastname@example.org, tel. +358 105 320 492
Jukka Erlund, Executive Vice President, Chief Financial Officer, email@example.com, tel. +358 105 322 113
Lauri Peltola, Executive Vice President, firstname.lastname@example.org, tel. +358 105 322 400
Nasdaq Helsinki Ltd
Main news media
Kesko and K-retailers form K Group, whose sales total over €13 billion. K Group is the third largest retail operator in Northern Europe and it employs approximately 45,000 people. Kesko operates in the grocery trade, the building and technical trade and the car trade. Its divisions and chains act in close cooperation with retailer entrepreneurs and other partners. Kesko's net sales are €10 billion and it employs approximately 30,000 people. Kesko has over 2,000 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia, Belarus and Poland. Kesko is a listed company and its shares are listed on Nasdaq Helsinki. The company's domicile and main business premises are in Helsinki. Kesko is the world's most responsible trading sector company (The Global 100 Most Sustainable Corporations in the World). www.kesko.fi
K-maatalous is part of Kesko's agricultural and machinery trade unit, which belongs to the building and technical trade division. In Finland, agricultural customers are served by the comprehensive K-maatalous store network. K-maatalous retailers' customers include agricultural entrepreneurs, machinery contractors, as well as equestrian professionals and enthusiasts. Many K-maatalous stores operate in connection with Rautia stores.
Lantmännen is an agricultural cooperative and Northern Europe's leader in agricultural, machinery, bioenergy and food products. Owned by 25,000 Swedish farmers, it has 10,000 employees, operations in over 20 countries and an annual turnover of SEK 37 billion. With grain as its basis, it refines farmland resources to create thriving farming. Some of Lantmännen's best-known product brands are AXA, Kungsörnen, GoGreen, Schulstad, Gooh, Finn Crisp and Bonjour. The company is founded on knowledge and values built up through generations of owners. Having research, development and operations throughout the value chain means that it can take responsibility together - from field to fork.