2005-05-24

Industri Kapital backs merger of Wihuri and Tradeka daily goods retail chains

Tradeka Corporation’s daily goods retail business Tradeka Ltd and Wihuri Group’s daily goods retail chains within Ruokamarkkinat Oy are merging their activities. The transaction will create a new strong domestic player in the Finnish retail market. It will benefit the consumers by increasing competition and improving efficiency in the industry.

The combined group will be the third largest actor in Finland’s daily goods retail industry with an approximate market share close to 14%, and a leader in the neighbourhood shop market. It has 750 stores, 6,900 employees and the combined net sales in 2004 were in excess of 1.3 billion euros.

Tradeka’s Siwa neighbourhood shops, Valintatalo supermarkets and Euromarket hypermarkets together with Wihuri’s Ruokavarasto neighbourhood shops, Sesto supermarkets and Etujätti hypermarkets will all become part of the same group, to be operated under the name Tradeka Ltd. The transaction is subject to approvals from competition authorities.

The new company will initially be 51% owned by Cooperative Tradeka Corporation with Wihuri and the private equity firm Industri Kapital having a 16% and 32% ownership respectively. Industri Kapital has an option to increase its ownership stake in the company to 67 % in the future. Following such a transaction, Tradeka’s and Wihuri’s ownership stakes would be equal. Management will become owners of the new company.

“The combination of the daily goods retail businesses of Wihuri and Tradeka is
an opportunity to create a new, more competitive entity in a changing market. The merger is logical because the concepts and the locations of the retail stores complement each other very well”, says Mr Matti Mustaniemi, President of Wihuri.

“Combining resources and knowledge secures larger volumes and increases efficiency which will directly benefit the consumers. The loyal customer bonus program will expand thanks to the growing number of store locations, especially in the Helsinki metropolitan area”, states Mr Antti Remes, President of Cooperative Tradeka Corporation.

“We look forward to working closely with the company’s management in further developing the business. In addition to providing capital to the company, we will leverage our extensive experience from the retail industry and focus on concept harmonisation and improved customer service”, says Mr Michael Rosenlew, Partner of Industri Kapital.
 
The personnel will transfer to the new company. The current managing director of Tradeka Ltd, Mr Markku Uitto, will become CEO of the new group.

For further information please contact:

COOPERATIVE TRADEKA CORPORATION
Ms. Riitta Raasakka, Communication Manager
tel. +358 9 733 2204

WIHURI OY
Mr. Matti Mustaniemi, President
tel. +358 9 4158 2630

INDUSTRI KAPITAL
Mr. Michael Rosenlew, Partner
tel. +46 8 678 95 25


Tradeka Group
The parent company of Tradeka Group is a cooperative owned by nearly 300,000 Finnish consumers. In 2004 net sales of the Group were 1.3 billion euros. The daily goods retail company Tradeka Ltd generated 83% of the net sales and 17% came from the hotel and restaurant company Restel Oy Ltd. With its multiple chain store structure, Tradeka is a centrally managed retailing company. It has three nation-wide shop brands: Siwa, Valintatalo and Euromarket. The Restel hotel brands are Cumulus, Rantasipi, Ramada, Holiday Inn and Crowne Plaza. Restarant brands include Martina, Huviretki, Parnell’s and Golden Rax Pizzabuffet.

The transaction includes the daily goods retail business Tradeka Ltd. including the three nation-wide shop brands: Siwa, Valintatalo and Euromarket.
http://www.tradeka.fi/

Wihuri
Wihuri is a Finnish international trade and industry group. The Wihuri Group comprises four major divisions: Daily Goods, Packaging, Technical Trade and Specialty Products and Services. In 2004 net sales of the group were 1.5 billion euros and the number of personnel approximately 6,200. The Daily Goods Division consists of two companies; Wihuri Oy Aarnio and Ruokamarkkinat Oy. Aarnio is the Group's wholesale grocery business while Ruokamarkkinat is the daily goods retail business operating the Ruokavarasto, Sesto and Etujätti shop brands.

The transaction includes the retail chains of Ruokamarkkinat Oy: Ruokavarasto, Sesto and Etujätti.
 http://www.wihuri.fi/

Industri Kapital
Industri Kapital is a European private equity firm with Nordic roots, managing close to 4 billion euros in fund commitments. Since 1989, Industri Kapital has acquired 50 European companies. The current portfolio encompasses 22 companies with a total turnover close to 7.5 billion euros.

Industri Kapital invests mainly in mid-sized companies with strong cash flow and profit improvement potential, operating in mature industries with fundamental underlying growth. Industri Kapital’s Finnish investments include Consolis, CPS Color, Dynea, Eltel Networks, Enermet, KCI Konecranes, Noviant and Paroc. The firm’s experience in the retail sector includes the Ellos, Lindex, Hjem-Is and Guldfynd investments.
http://www.industrikapital.com/

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