To the Nordic wholesale and food retail operators, hungry for growth and consolidation after decades in an unchanged landscape, further deals are constantly being anticipated. And only hours after the deal between two Norwegian groups, the Narvesen food-service group and the food retail chain Rema 1000, was sealed on Monday (6 November), the parties said their eyes were set on Sweden for expansion.
Rema 1000 owner Odd Reitan said he gained experience from previous attempts to establish a chain of outlets in the Swedish food market: “What we learned then was that that is not the way you do it in Sweden. If we are going to do anything it will have to be through acquisitions.” Reitan was frank about his interest in Sweden´s third largest food retail operator. “I am very keen on Axfood. It is our only possible partner,” he said, reiterating that the company did not lack the money for such a move, its financial muscles further enhanced by the pact with Narvesen.
Separately, Axfood posted on Tuesday (7 November) a nine-month profit after net financial items of SKr20m. Its 1999 proforma results for the same period (the group was formed in March, 2000) were SKr194m. Company controllers, the Johnson family, said costs associated with the merger process were the main reason for the fall in earnings. Shares in Axfood were among the winners on the Stockholm Stock Exchange on Tuesday and rose nearly 7% to SKr62.50 in response to Reitan’s comments.
A deal with Axfood could also imply getting control of Denmark’s largest food wholesaler, Dagfroa. The Danish group rushed to join Tuesday’s action and openly admitted to talks with Axfood, for one, exploring the possibilities for a closer alliance. The two groups already take part in their joint-purchasing company United Nordic.
Axfood did not comment on the invitation from Reitan Narvesen but, in the context of the Dagfroa report, managing director Mats Jansson said that the group’s ambition to be number three in all the Nordic markets in five years was still in place and that today it did not have any business in Denmark. “Five years might sound like a long time, but in this business it is not. Something has to happen within this period,” Jansson said.