Brief: Axfood Acquires Wholesale Business Bergendahls Food And Enters Into Partnership With City Gross

Axfood AB

31/05/2021 07:26

May 31 (Reuters) - Axfood AB  AXFO.ST :
    * AXFOOD ACQUIRES THE WHOLESALE BUSINESS BERGENDAHLS FOOD
AND
ENTERS INTO PARTNERSHIP WITH CITY GROSS
    * ACQUIRES WHOLESALE BUSINESS OF BERGENDAHL FOOD AB AND
STRENGTHENS ITS PRESENCE IN SWEDISH FOOD RETAIL MARKET
    * TOTAL CONSIDERATION AMOUNTS TO SEK 1.8 BILLION AND IN
CONNECTION
WITH TRANSACTION, AXFOOD INTENDS TO CARRY OUT A RIGHTS ISSUE OF
SEK 1.5 BILLION TO MAINTAIN A STRONG FINANCIAL POSITION AND
FLEXIBILITY GOING FORWARD.
    * TRANSACTION THAT CREATES ECONOMIES OF SCALE, SYNERGIES AND
IMPROVED COMPETITIVENESS
    * WITH PARTNERSHIP, AXFOOD GETS EXPOSURE TO HYPERMARKET
SEGMENT OF
SWEDISH FOOD RETAIL MARKET, AND THEREBY INCREASING GROUP'S
PRESENCE AND REACH.
    * TRANSACTION IS EXPECTED TO BE ACCRETIVE TO AXFOOD'S
EARNINGS PER
SHARE FROM 2022
    * AFTER INTEGRATION COSTS HAVE BEEN INCURRED AND SYNERGIES
HAVE
STARTED TO BE ATTAINED, ALSO ACCOUNTING FOR EFFECTS FROM RIGHTS
ISSUE, TRANSACTION IS EXPECTED TO BE ACCRETIVE TO EARNINGS PER
SHARE FROM 2023.
    * UPON FULL EXERCISE OF CALL OPTION, INITIAL CONSIDERATION
AMOUNTS
TO SEK 1.8 BILLION AND TOTAL CONSIDERATION AMOUNTS TO SEK 2.5
BILLION, OF WHICH SEK 1.5 BILLION PERTAINS TO BERGENDAHL
WHOLESALE
    * AXFOOD EXPECTS ACQUISITION OF BERGENDAHL WHOLESALE,
INCLUDING
EFFECTS FROM SIGNED DELIVERY AGREEMENT WITH CITY GROSS, TO
GENERATE ANNUAL COST SYNERGIES OF APPROXIMATELY SEK 200 MILLION,
WHICH ARE EXPECTED TO BE REALISED SUCCESSIVELY UP TO AND
INCLUDING 2025, INTER ALIA WITHIN PURCHASING, ASSORTMENT
OPTIMISATION, LOGISTICS AND ORGANISATION
    * TO ATTAIN SYNERGIES, AXFOOD EXPECTS TO INVEST
APPROXIMATELY SEK
100 MILLION IN IT AND LOGISTICS DURING 2021-2023
    * FURTHERMORE, INTEGRATION AND TRANSACTION COSTS OF
APPROXIMATELY
SEK 200 MILLION UP TO 2023 ARE EXPECTED
    * ADDITIONALLY, IT WRITE DOWNS, WITH NO CASH FLOW EFFECT,
ARE
EXPECTED TO LOWER RESULTS BY APPROXIMATELY SEK 100 MILLION
DURING CORRESPONDING PERIOD
    * ACQUISITION OF BERGENDAHL WHOLESALE WILL BE REPORTED IN
DAGAB
SEGMENT.
    * SHORT-TERM, ACQUISITION WILL BE FINANCED THROUGH A
COMBINATION
OF EXISTING CASH AND CREDIT FACILITIES
    * BOTH PARTIES AGREE THAT CLOSING CAN TAKE PLACE NO EARLIER
THAN 1
SEPTEMBER 2021.

Source text for Eikon:  ID:nWkr5ckwPl 
Further company coverage:  AXFO.ST 

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