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
Mr. Matti Mustaniemi, President
tel. +358 9 4158 2630
Mr. Michael Rosenlew, Partner
tel. +46 8 678 95 25
About Industri Kapital
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.
About Tradeka Group
The transaction includes the daily goods retail business Tradeka Ltd. including the three nation-wide shop brands: Siwa, Valintatalo and Euromarket.
The transaction includes the retail chains of Ruokamarkkinat Oy: Ruokavarasto, Sesto and Etujätti.