Orkla said the buy-out, valued at 6.1 billion NOK (around €835million) on a debt free basis, will help it take ‘a significant step’ towards becoming a pure play branded consumer goods company, and will help move the firm into new segments of the food sector and expand its position in the Nordics, central Europe and Russia.
Rieber & Søn holds expertise in the manufacture of sauces, soups, bake mixes and ready-made meals, with a portfolio that includes Czech food maker Vitana, Nordic condiment maker K-Salat, Polish dessert firm Delecta and Russian nuts maker Chaka, among others.
"With this acquisition, Orkla expands its product portfolio and gains strong market positions in categories that are entirely new to us," said Aage Korsvold, president and CEO at Orkla.
Speaking at a press conference Stein Erik Hagen, chairman of the board at Orkla, said the deal puts the group in a position where it is “ready to meet competition from large multinationals in the international market.”
“We both are living in a market where we meet competition from all of the leading multinational competitors. And I am very enthusiastic with a view to the branded consumer goods company we are now creating,” said Hagen.
Orkla will buy 90.11% of the shares in the Rieber & Søn business from the Rieber family itself, who founded the company in 1839. Orkla then plans to make an offer to minority shareholders at a later date, the firm said
Also speaking at the press conference, Fritz Rieber, representative of the Rieber family said the family has chosen to sell the business with ‘mixed feelings’.
“We feel that Orkla will be the best owner of the business activities of Rieber & Søn at this point,” he said.
“Giving up the ownership of an enterprise that has been owned by the family for more than 173 years is not done easily,” said the family representative. “As the main owner of Rieber & Søn we are of the opinion that Orkla ... will be a good parent for activities.
“Orkla as a company has a long heritage of and the fact that they can continue the development of our activities in Nordic countries and central Europe, based on Norwegian value standards and attitudes. This has been very important in the decision we have come to.”
Korsvold added that the acquisition of Rieber & Søn is a ‘value creation transaction’ for Orkla.
“We are doing this because Rieber has a number of very strong number two and number one positions in the Nordic markets,” he said, adding that the deal will a mean Orkla gains several top market positions in addition to widening its overall geographical catchment area.
“We are two organisations that are really, surprisingly I’d have to say, complimentary,” said the Orkla CEO. “They are two companies that are based on local tastes, but as far as technologies and products are concerned. We are very complimentary."