Norwegian foodservice group Narvesen and retailer Rema 1000 have announced that their boards of directors have agreed to propose to shareholders a full merger of the two groups to form Reitan Narvesen ASA, a foodservice and wholesale group with a combined turnover of NKr20bn.
Both companies are controlled by large shareholders and, according to information provided at a press conference in Oslo, owners controlling 66.4% of the two groups have already agreed to the proposed merger. A two-thirds majority is required for the plans to go through, which means that the merger is practically already approved.
The new group will operate in seven countries, employing 17,000 people in 2,160 brand-name outlets. The core business will be to operate food chains and foodservice chains and related wholesale businesses, helped by the substantial purchasing powers the group will gain. Odd Reitan, owner of Rema 1000, explained: “This is a strategic move that will give us further leverage with the great number of our brand products. Within trade and foodservice we will continue to strenghten our positions both in Norway and abroad.”
“It´s two companies which together will have exciting opportunities. We complement each other in the market and have different relations to the customers,” said Harald Tyrdal, managing director of Narvesen. In Norway, Narvesen also operates foodservice operations in chains such as Cafe Opus (Caroline), Peppe’s Pizza, Burger King and TGI Friday’s. In Sweden, it runs the Pressbyrån service outlets and 7-Eleven.
The merger is also seen as the solution to Rema 1000’s ambition to seek a stock-listing. Narvesen is already on the Oslo Stock Exchange and the share jumped 30% to NKr325 at midday when trading was resumed after having been halted on Monday.
As part of the current who’ll-eat-who-game in the Nordic food retail market, Odd Reitan had earlier said he did not exclude a foreign acquistion as means of reaching growth and a stock-listing. However, today’s deal will now shelve such plans and both parties said they were content with the all-Norwegian deal. Odd Reitan commented: “We have been evaluating several international and national parties but it has been proven to us that a merger with Narvesen is the best solution because it provides us with a strong platform and it also is in the best interest of our families.”
The Reitan family will get 49.2% of the new group while Narvesen will hold 47.6%. The remaining shares will be held by minority shareholders. Odd Reitan is proposed as new chairman while Tyrdahl is expected to assume the duties as the new group’s managing director.
The Narvesen-Rema 1000 deal is just the latest in the long row of mergers and deals in the Nordic food retail and food services market in recent months, and further deals can be expected. Axfood, Sweden’s third largest food chain, has also expressed ambitious expansion plans and a move is widely anticipated.