The acquisition price consists of a fixed amount and an amount depending on the development of Norgros' business operations during 2005-2008. The fixed part of the price, NOK 582 million (EUR 74 million) is to be paid as soon as the transaction has been executed. The rest of the acquisition price, NOK 191 million at the maximum (EUR 24.3 million) is to be paid in four parts in 2006-2009. Rautakesko has also offered to acquire the shares held by the other Norgros owners on the same terms by 27 June 2005. The total value of all shares at the agreed and offered price is NOK 972 million (EUR 123.7 million).
The plan is to execute the acquisition immediately after the approval of the Norwegian competition authorities and the completion of other conditions precedent. The objective is to complete the acquisition by the end of July.
Norgros manages the Byggmakker hardware and building materials chain, which is the best known in Norway and the market leader with a market share of about 18%. The Byggmakker chain comprises 133 stores, 20 of which owned by Norgros. The other stores of the chain are owned by retailer-entrepreneurs who have signed a chain agreement with Norgros. In 2004, the net sales of the company totalled NOK 3.9 billion (about EUR 496 million) and its operating profit before goodwill amortisation was NOK 106 million (EUR 13.5 million). The company's profit has developed favourably during the last few years. At the end of 2004 Norgros employed 585 persons. The Byggmakker chains' retail sales were NOK 7.3 billion (EUR 928 million) in 2004.
Rautakesko's 2004 net sales totalled EUR 1,150 million, 36% of which came from outside Finland. In Finland, Rautakesko operates a chain of 40 K-rauta stores and a chain of 105 Rautia stores plus the nationwide B-to-B Service unit. In Sweden, there are currently 14 K-rauta stores. In Estonia and Lithuania, Rautakesko is the market leader in the hardware and builders' supplies trade. In Latvia, Rautakesko operates three K-rauta stores. In Russia, Rautakesko is in the process of finalising the acquisition of the St. Petersburg Stroymaster chain.
Further information:
Juhani Järvi, Corporate Executive Vice President, Deputy to the President and CEO, Kesko Corporation, tel. +358 1053 22209
Jari Lind, President, Rautakesko Ltd, tel. +358 1053 20200
Mikael Forss, Executive Vice President, Rautakesko Ltd, tel. +358 500 909 005
Juhani Järvi, Corporate Executive Vice President, Deputy to the President and CEO, Kesko Corporation, tel. +358 1053 22209
Jari Lind, President, Rautakesko Ltd, tel. +358 1053 20200
Mikael Forss, Executive Vice President, Rautakesko Ltd, tel. +358 500 909 005
Kesko Corporation
Anne Leppälä-Nilsson
General Counsel
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