Norway's Orkla expands food business with $1 billion deal
OSLO (Reuters) - Norwegian conglomerate Orkla (ORK.OL) is to buy food producer Rieber & Soen RIE.OL in a deal valuing the target at 6.1 billion crowns ($1.03 billion) on a debt free basis, Orkla said on Monday.
The purchase, valued at a 78 percent premium to Rieber's closing share price on Friday, moves Orkla into new segments of the food sector and expands its position in the Nordics, central Europe and Russia, key growth areas in recent years, the firm added.
"With this acquisition, Orkla expands its product portfolio and gains strong market positions in categories that are entirely new to us," Chief Executive Aage Korsvold said.
Orkla, which sells branded food products and has interests in a range of other industries including hydropower generation, extruded aluminum products and paints and coatings as well as having a separate financial investment company, has bought the company from the Rieber family which founded the firm in 1839.
Under the deal it is buying 90.11 percent of Rieber from the family at 66.58 per share and Orkla plans to make an offer to minority shareholders later, the firm said.
Rieber & Soen's portfolio includes Czech food maker Vitana, Nordic condiment maker K-Salat, Polish dessert firm Delecta and Russian nuts maker Chaka, among others.
In has 2900 employees and generated sales revenues of 4.3 billion crowns in 2011.
($1 = 5.9468 Norwegian krone)
(Reporting by Balazs Koranyi; Editing by Greg Mahlich)