Nordic retailer ICA Baltic AB, a subsidiary of ICA AB in which Ahold holds a majority stake, has purchased the remaining 50% in Rimi Baltic AB that it does not already own from Kesko Food. The deal sees Rimi Baltic becoming a wholly owned subsidiary of ICA . ICA Baltic will also acquire four properties in Estonia currently owned by Fiesta Real Estate AS, an Estonian subsidiary of Kesko.
“This deal is in line with ICA’s goal of being number one in all markets where we operate. We are already number one in Sweden, and in Norway our expansion plans are strengthening our position even further. A full ownership in Rimi Baltic increases our growth potential also in the fast growing Baltic market”, said Kenneth Bengtsson, president and CEO of ICA.
“By integrating Rimi Baltic as a wholly owned company we will have an even stronger Nordic/Baltic organisation where we will be able to realise synergies within sourcing, administration and IT”, he continued.
ICA Baltic paid EUR190m in cash for Kesko Food’s shares and an additional EUR50m for the four properties in Estonia. Rimi Baltic was established in January 2005 as a joint venture between the two companies. It operates hypermarket, supermarket and hard discount formats with 64 outlets in Estonia, 86 in Latvia and 50 in Lithuania.
In 2005, Rimi Baltic had a turnover of EUR810m and EBIT of EUR1.2m. The turnover for the first half of 2006 totalled approximately EUR450m, an increase of 20% on the comparable period of last year.
Rimi Baltic currently controls around 16% of the total Baltic food market, which is worth approximately EUR5.2bn annually.
The transaction is subject approval by the European Commission. This is expected to be granted towards the end of the year, the company said.