Solna, Sweden, 2017-Oct-23 — /EPR Retail News/ — The Lithuanian Competition Authority has reached a decision regarding ICA Gruppen’s subsidiary Rimi Lithuania’s acquisition of UAB Palink, which operates the IKI grocery store chain. The authority has given its clearance to the deal under the condition that 17 specific stores be sold prior to completion of the transaction. The ambition is to close the deal before year-end, however, if the divestment process takes longer, closing could be delayed until the first quarter of 2018.
The divestments are not expected to materially affect the overall value creation of the acquisition, or the previously communicated annual cost synergies of approximately EUR 15 million when fully realised in 2020. The synergies will be achieved primarily through larger purchasing volumes, more efficient logistics and marketing. As previously communicated the acquisition is expected to lead to one-off costs of approximately EUR 40 million and capital expenditures of approximately EUR 25 million during 2018 and 2019.
The aim is to have signed agreements to divest all 17 stores before year-end. However, if the divestment process takes longer, the acquisition of UAB Palink may not be completed until during the first quarter of 2018.
The 17 stores that will be divested accounted for 49 milion EUR in net sales during 2016. IKI is the second-largest player in the Lithuanian grocery retail market with a nationwide network of approximately 230 stores. Rimi had 57 stores in Lithuania at the end of 2016. For the full year 2016 IKI’s sales amounted to EUR 632 million. EBITDA was EUR 33 million, while EBIT was EUR 12 million.
For more information
ICA Gruppen’s press service, Telephone number: +46 10 422 52 52
SOURCE: ICA Gruppen