KESKO TO ACQUIRE THE MAJORITY SHAREHOLDING IN THE NORWEGIAN NORGROS COMPANY

Kesko has signed a preliminary agreement to acquire the majority shareholding in Norgros ASA, a company owning Norway’s largest store chain for hardware and building materials. The acquisition is implemented through purchase of shares and a targeted share issue. Kesko’s Board of Directors has approved the preliminary agreement signed with Norgros ASA and its major shareholders. Rautakesko’s aim is the market leadership in the Nordic and Baltic countries. Following this transaction, the share of foreign operations of Rautakesko’s net sales increases from 13 percent to 40 percent. The purpose is to conclude the final transaction by the end of the year. The price for the acquisition of the majority shareholding is about EUR 30,6 million (NOK 245 million / about FIM 183 million).

The implementation of the targeted share issue now planned is subject to the approval of the General Meeting of Norgros and of Norway’s Ministry of Industry and Competition Authority. According to the agreement signed, Kesko’s subsidiary, Rautakesko Oy, will purchase 34 percent of Norgros shares from the present shareholders. At the same with the final purchase of shares, the General Meeting of Norgros ASA will make a decision on a targeted share issue to Rautakesko. Following the purchase of shares and the subscription, Rautakesko will hold about 50.2 percent of Norgros’ shares and voting rights. In addition, the present shareholders have the right to sell the minority interest gradually by 30 April 2007.

The net sales of Norgros ASA for 2000 amounted to about EUR 460 million (NOK 3,711 million / FIM 2,740 million). The combined net sales of its chains were about EUR 900 million (NOK 7,140 million / FIM 5,350 million). Norgros’ share of the Norwegian hardware and building materials market is about 16.8 percent. The purchase will increase Rautakesko’s net sales by over 41 percent.

Norgros ASA is a nationwide cooperation chain for building materials dealers. Up till now, it has been mainly owned by its members. Norgros ASA’s operations include building materials sales outlets and wholesale trade in these products, as well as logistical services and the development of chain concept. Norgros has in Norway two store chains for hardware and building materials: a total of 161 stores belong to the Byggmakker chain and the Rådhuset chain. Norgros ASA owns 19 of these stores, the combined net sales of which are EUR 122 million (NOK 965 million / FIM 726 million).

Due to the changes in the chains, Norgros ASA’s net sales for 2002 are forecast to be about EUR 360 million (about NOK 3,000 million / FIM 2,140 million) and the combined net sales of its chains about EUR 700 million (NOK 5,600 million / FIM 4,160 million), with which figures it will retain its market leader position in Norway.

Rautakesko’s net sales for 2000 amounted to EUR 786 million (FIM 4,670 million). Rautakesko Ltd purchases and sells products and services for building, renovation and interior decoration. In Finland, Rautakesko has two chains: 46 stores belong to the K-rauta chain and 102 stores to the Rautia chain. The combined sales of the chains for 2000 amounted to EUR 955 million (FIM 5,700 million). Rautakesko is Finland’s market leader with a market share of about 37 percent. Rautakesko’s Industrial and Constructor Sales unit is responsible for the wholesale of hardware and builders’ supplies to professional customers in the building sector, to the manufacturing industry and to municipalities and institutions.

There are at present 10 K-rauta stores operating in Sweden. In 2002, the number will increase by two. Rautakesko is Estonia’s market leader with four retail stores and nationwide wholesale operations. In Latvia, there is a wholesale outlet and, under construction, one retail store, which will be opened in the spring of 2002. In addition, Rautakesko has a wholesale outlet in Moscow.

Both Norgros and Rautakesko are partners in Euro-Mat s.a, the largest European purchasing organisation for hardware and builders’ supplies dealers.

The present management of Norgros will continue in their duties. The transaction has no effect on personnel.

Further information:
Kesko Corporation, President and CEO Matti Honkala, tel. +358 10 5311
Rautakesko Oy, President Matti Halmesmäki, tel. +358 1053 20810
Rautakesko Oy, Executive Vice President Simo Manner, tel. +3581053 20123
Norgros ASA, Managing Director Tor Ivar Riise tel. +47 975 19432

KESKO CORPORATION
Corporate Communications

Erkki Heikkinen
Senior Vice President

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