Hakon Invest AB : Hakon Invest Acquires Remaining Shares in ICA - the New ICA Gruppen Becomes One of the Leading Listed Nordic Retail Companies (2024)

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Hakon Invest Acquires Remaining Shares in ICA -the New ICA Gruppen Becomes One of the Leading Listed Nordic Retail Companies

Hakon Invest is acquiring the remaining 60 per cent of the shares in ICA from the Dutch entity Royal Ahold for a cash consideration of SEK 20 billion. As Hakon Invest and ICA become one group, ICA Gruppen, the best conditions are created for ICA to continue its development in the long term.

• Hakon Invest has signed an agreement with Ahold to acquire the remaining 60 per cent of the shares in ICA for a cash consideration of SEK 20 billion, which corresponds to

approx. SEK 33 billion for 100 per cent of the shares. The transaction is, inter alia,
conditioned upon approval by the relevant authorities.

• The acquisition is being financed with existing cash and a secured bridge financing from Handelsbanken and Nordea. Following completion of the deal, the bridge financing is intended to be repaid by an underwritten share issue to Hakon Invest's shareholders of approx. SEK 5 billion, long-term debt financing and an issue of preference shares in ICA Fastigheter.

• Due to the bridge financing and the subsequent share issue, Hakon Invest will not distribute any dividend in 2013.

• ICA's CEO Per Strömberg is envisioned as CEO of the new ICA Gruppen.

• In connection with and conditioned upon completion of the acquisition, the ICA Retailers

Association is selling 10 per cent of capital and votes in Hakon Invest to Industrivärden.
"As Hakon Invest and ICA become one group, with a common strategy, the best conditions for ICA to continue to develop its business are created. We gain a simpler structure and a greater resolve in the organisation," says Hakon Invest's CEO, Claes-Göran Sylvén. "The ICA concept endorses competition between individual retailers and successfully opens ICA up to competition as a goods and services provider. It's a business model that has been a success for nearly 100 years now."
"The board has carefully evaluated various possible alternatives for a change of ownership in ICA and has now settled on a deal that looks after our shareholders' interests in the best possible way," says Hakon Invest's chairman, Hannu Ryöppönen. "The deal strengthens the conditions for continued satisfactory and stable dividends to our shareholders."
"The acquisition of the remaining shares in ICA means that we secure our ownership in ICA for the future. Thus, we create the best conditions for ICA as well as for the individual retailer, while at the same time making our roll as principal owner clear. It's a good deal for all shareholders, including the ICA Retailers Association," says the ICA Retailers Association's chairman, Peter Berlin. "Industrivärden contributes solid experience from active ownership in large, successful

The information herein is such that Hakon Invest AB must disclose pursuant to the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 07:00 CET on Monday, 11 February 2013.

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public companies. We share the ambition that ICA Gruppen shall provide a good return and be an attractive, long-term investment for all shareholders."

Background and Rationale

In a press release dated 4 September 2012, Ahold announced that it would explore strategic options for its ownership in ICA. Since the inception of the Hakon Invest-Ahold partnership in
2000, the governance of ICA has been regulated by a shareholders' agreement, which entails joint control, with a requirement for consensus for all decisions by the board of directors and the general meeting of shareholders. ICA's owners have, therefore, each controlled 50 per cent of the votes.
Hakon Invest's primary missions are to generate profits for shareholders as well as to develop and safeguard the ICA concept by means of holding material influence over ICA through its ownership. Accordingly, Hakon Invest has conducted a careful evaluation of various possible alternatives for a change of ownership in ICA, including the consequences of a listing on the stock exchange, in order to best look after the interests of its shareholders. It is the judgment of Hakon Invest's board of directors that the acquisition of the remaining shares of ICA is the alternative
that provides the best conditions for ICA to successfully continue to develop its business and generate a good return and hence create value for Hakon Invest's shareholders in the long term.
This transaction will have no direct impact on ICA and Ahold's joint activities in areas such as sourcing and responsible retailing. Ahold looks forward to continuing to work together on these areas, which are mutually beneficial and support Ahold's business goals.

Hakon Invest Becomes the New ICA Gruppen

Following the acquisition of the outstanding 60 per cent of the shares in ICA, Hakon Invest
intends to change its name to ICA Gruppen in order to reflect the group's focus. ICA Gruppen will be a focussed retail company, with four business areas: food, banking, real estate and non-food, with the further growth of ICA and ICA-related businesses as its main mission. The purpose is to create a distinct business focus in the different business areas, so that the company can best take advantage of the growth opportunities in each area. The five portfolio companies which Hakon Invest owns today in addition to ICA comprise less than 10 per cent of Hakon Invest assets and will be evaluated vis-à-vis the new business focus in a responsible manner. The ambition is to gather all non-food businesses, which are viewed as supporting the main business, into one business area and to expand this further into new business opportunities.
ICA has a solid strategic business plan for the coming years that has been developed together with the owners. Overall, this entails generating profitable growth within all parts of ICA, with the Norwegian operations as a prioritised area. The plan will predominantly provide the basis for the company's operations following the change in ownership.
ICA's CEO Per Strömberg is envisioned as CEO of the new ICA Gruppen, following completion of the transaction. Hakon Invest's CEO, Claes-Göran Sylvén, will remain CEO of the ICA Retailers Association, a role he has occupied since 2003.

The Transaction

Hakon Invest has signed an agreement with Ahold to acquire the remaining 60 per cent of the shares in ICA for cash consideration of SEK 20 billion, corresponding to approx. of
SEK 33 billion for 100 per cent of the shares in ICA.

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Hakon Invest is financing the acquisition of ICA with existing cash and a secured bridge financing provided by Handelsbanken and Nordea. The bridge financing is intended to be repaid in part by an underwritten share issue to Hakon Invest's shareholders of approx.
SEK 5 billion. Following completion of the transaction, the remaining portion of the bridge financing is intended to be repaid by long-term debt financing, which will primarily utilise available debt capacity in ICA Fastigheter, as well as an issue of preference shares in ICA Fastigheter. Due to the bridge financing and the subsequent share issue, no dividend will be paid during 2013.
From 2014 onwards, the group is anticipated to return to distributing an annual dividend to shareholders.
Upon completion, the Hakon Invest group will have a net debt (excluding pension debt), excluding the ICA Bank, of approx. SEK 20 billion. Hakon Invest plans to carry out financing steps which will cut the net debt amount in half within 12 to 18 months. This corresponds to approx. 2 times earnings before depreciation and amortisation (EBITDA). The ambition is that the new group will establish a capital structure over time that entails a net indebtedness corresponding to 1.0-1.5 times EBITDA and, at the same time, ensure that shareholders receive a stable, satisfactory
return on investment and long-term value appreciation.

New Share Issue

The board of directors has resolved to convene an extraordinary meeting of shareholders on Wednesday, 13 March 2013 which, among other things, is proposed to authorise the board to resolve on the share issue. Following completion of the acquisition, a portion of the bridge financing is intended to be refinanced via a share issue to Hakon Invest's shareholders of approx. SEK 5 billion. The majority shareholder in Hakon Invest, the ICA Retailers Association,
has committed, along with Industrivärden, to subscribe for their respective pro rata shares and to underwrite the remaining portion of the share issue.
Only ordinary shares will be issued to holders of ordinary and class C shares in Hakon Invest in the share issue. All class C shares are owned by the ICA Retailers Association. The share issue is proposed to be structured so that holders of ordinary shares are given the right to subscribe to new ordinary shares at a lower subscription price compared to the subscription price offered to the holder of the class C shares. The lower subscription price for ordinary shareholders compensates for the fact that class C shareholders, whose shares do not entitle the holder to
cash dividends until 1 January 2016, are entitled to subscribe to dividend-bearing ordinary shares in the share issue. The subscription price and other conditions for the share issue will be announced at the time the board of directors passes a resolution on the share issue, which is estimated to occur at the time of the completion of the acquisition.

Share Structure

Hakon Invest's share capital amounts to SEK 402,293,590 divided among 160,917,436 shares.
As of 31 December 2012, the number of class C shares amounted to 82,067,892 and the number of ordinary shares amounted to 78,849,544, of which 251,870 ordinary shares are held by Hakon Invest. Ordinary shares and class C shares have the same voting rights but differ in the right to dividends. While ordinary shares have an unrestricted entitlement to dividends, the class C
shares have no right to cash dividends. All class C shares will be converted to ordinary shares on
1 January 2016, which means that Hakon Invest subsequently will only have one class of shares, in the form of dividend-bearing ordinary shares. The total number of shares remains unchanged after the conversion.

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The scheduled share issue concerns only ordinary shares, which means that the number of class C shares will remain unchanged while the number of ordinary shares will increase. All class C shares are owned by the ICA Retailers Association.

ICA Retailers Association Sells Shares to Industrivärden

In connection with the announcement of the acquisition, the ICA Retailers Association has agreed to sell ordinary shares representing 10 per cent of the capital and voting rights in Hakon Invest to Industrivärden, subject to completion of the acquisition. The ICA Retailers Association's
ownership in Hakon Invest thereby decreases from 67.3 per cent to 57.3 per cent of the capital
and votes.

Financial Consequences for Hakon Invest

Taking into account a preliminary acquisition analysis, a consolidation of Hakon Invest's and ICA's financial information renders net sales for the new group of approx. SEK 100 billion and earnings before depreciation and amortisation (EBITDA) of SEK 5 billion for the period 1 January
2012-31 December 2012. As a consequence of the transaction, the value currently included in
Hakon Invest's group balance sheet regarding ICA will increase due to a revaluation in the accounts. The revaluation entails a positive effect on earnings of the same amount, estimated at approx. SEK 8 billion, which will be taken up as income once the transaction is completed.
Hakon Invest and Ahold have agreed upon a dividend from ICA for 2012 of SEK 2 billion, of which Ahold receives SEK 1.2 billion. This entails an unchanged dividend from ICA compared to the previous year.

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ICA

The ICA group is one of the leading food retail companies in the Nordic countries. It comprises a total of approx. 2,100 self-owned and retailer-owned stores in Sweden, Norway and the Baltic states. In addition, ICA offers financial services to its customers in Sweden via ICA Banken. ICA
Fastigheter owns and manages ICA's properties in Swedish and Norway.

The ICA Concept

The axis of the ICA group's business is the Swedish business and the ICA concept, that is to say, the voluntary cooperation that exists between the ICA group and individual ICA retailers in Sweden, who own and operate their own stores. The ICA concept means that diversity and local adaption can be combined with scale and efficiency to great success, and it has strong cultural ties. This business model is built on constant dialogue between ICA and individual retailers in order to create understanding and agreement, and it aims to create competitive customer offerings. The ICA concept also endorses competition between individual retailers and opens ICA up to competition as a goods and services provider.
This business model has been developed and refined over the years and shown itself to be a financially robust model that contributes to the fact that customers shop to a great extent at ICA, which, in turn, leads to greater profits both for ICA and for individual ICA retailers. The change of ownership in ICA will not affect this cooperation; on the contrary, it is one of Hakon Invest's primary tasks to promote the preservation, growth and security of the ICA concept in the long term.

Conditions

The acquisition is conditioned upon approval from the competition authorities in Sweden and Norway, as well as an ownership assessment in ICA Banken by the Swedish Financial Supervisory Authority. In addition, the acquisition is conditioned upon the approval by an ICA Retailers Association members' meeting of the ICA Retailers Association's participation in the planned Hakon Invest share issue.
As stated above, Ahold announced in a press release dated 4 September 2012 that it would evaluate strategic options for its ownership of ICA. A listing of ICA on the Nasdaq OMX Stockholm was one alternative that was to be evaluated. To compensate Ahold for the
contingency that the acquisition of Ahold's shares is not completed, Hakon Invest has undertaken
to pay compensation of SEK 550 million to Ahold should the relevant approvals from the authorities not be obtained.

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Extraordinary General Meeting in Hakon Invest

In order to authorise the board of directors to resolve on the share issue, an extraordinary general meeting of shareholders in Hakon Invest will be held on Wednesday, 13 March 2013 at
17:00 CET. The notice for the extraordinary general meeting will be published separately and will be made available, together with information regarding registration, at www.hakoninvest.se

Important Preliminary Dates and Events Related to the Acquisition

11 February Notice to attend the extraordinary general meeting of shareholders is published
13 March The extraordinary general meeting of shareholders in Hakon Invest authorises the board of directors to resolve on share issues
April Anticipated completion of the acquisition, given approval by relevant authorities, etc.
April The board of directors resolves on a share issue by virtue of the authorisation granted at the extraordinary general meeting of shareholders
April/May Subscription period for new shares in a share issue

Advisors

Handelsbanken Capital Markets is acting as M&A-advisor in the transaction. Handelsbanken Capital Markets and Nordea Markets are acting as joint lead managers for the upcoming share issue and as financial advisors for the transaction and its overall financing. Gernandt & Danielsson Advokatbyrå is acting as legal advisor in connection with the transaction. Kastell Advokatbyrå is acting as legal advisor on competition-related matters.

Media and Analyst Presentation

Hakon Invest will hold a Swedish-language media and analyst presentation today, Monday, 11
February 2013, at 10.00 CET at Spårvagnshallarna, Birger Jarlsgatan 57A in Stockholm, Sweden. CEO Claes-Göran Sylvén and CFO Göran Blomberg will give a Swedish-language presentation
of the acquisition and the 2012 year-end report, and a Q&A session will be held after the initial presentation.
Registration to attend the media and analyst presentation can be made via ir@hakoninvest.se. A
live webcast of the media and analyst presentation will be broadcast on www.hakoninvest.se.
A conference call in English will be held at 14:30 CET today in relation to the acquisition. Dial number is found in the separate invitation to the media and analyst presentation and on the Company's web site under Investor Relations.

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For more information, please contact:

CEO, Hakon Invest
Claes-Göran Sylvén
Tel. +46 (0) 8-55 33 99 64
CFO, Hakon Invest
Göran Blomberg
Tel. +46 (0) 8-55 33 99 99
Head of IR, Hakon Invest
Pernilla Grennfelt
Tel. +46 (0) 8-55 33 99 55
E-mail: pernilla.grennfelt@hakoninvest.se

IMPORTANT INFORMATION

The information in this press release is not intended to be published or distributed, directly or indirectly, in the United States of America, Australia, Hong Kong, Japan, Canada, Switzerland, Singapore, South Africa or New Zealand. Distribution of this press release might be forbidden in some other jurisdictions. The information of this press release shall not constitute an offer to sell
or a request to purchase any shares in Hakon Invest in any jurisdiction. This press release neither constitutes nor constitutes a part of an offer or request to purchase or subscribe for securities in the United States of America. Securities referenced to herein may not be offered or sold in the United States of America without registration or exemption from registration according to the U.S. Securities Act of 1933, as amended ("Securities Act"). Hakon Invest does not intend to register any part of the offer of securities in United States of America or carry out an offer of securities to the public in the United States of America. Copies of this announcement is not distributed or sent to and may not be distributed or sent to, the United States of America, Australia, Hong Kong, Japan, Canada, Switzerland, Singapore, South Africa or New Zealand.
This document has not been approved by any regulatory authority. This document is a press release and not a prospectus, and investors shall not subscribe for or purchase securities referred to in this document, except on the basis of information that appears in the prospectus, which will be published by Hakon Invest on its company website at the appropriate time.

THE EUROPEAN ECONOMIC AREA Hakon Invest has not resolved to offer shares or rights to the public in any member state of the European Economic Area, with the exception of Sweden and other jurisdiction into which the offer of shares or rights may be passported. Within those member states within the European Economic Area, except for Sweden (and other jurisdiction in which the offer of shares or rights may be passported), which have implemented the Prospectus Directive (a "Relevant Member State"), no measure has been taken as of this date to direct an offer of shares or rights to the public which would require that a prospectus be published in any Relevant Member State. As a consequence hereof, the shares and rights may only be offered in a Relevant Member State (a) to qualified investors (as defined in the Prospectus Directive or other applicable law), or (b) in any other respect that does not require that Hakon Invest publish a prospectus in accordance with Article 3(2) of the Prospectus Directive. PRESS RELEASE

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As used herein, the expression "an offer of shares or rights to the public" in any Relevant Member State shall entail communication, in any form, of sufficient information about the terms for the offer and the shares or rights which are offered in order for an investor to be able to make a decision to buy the securities, as this may differ in said Relevant Member State as a result of the implementation of the Prospectus Directive in said Relevant Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC, including all implementation measures in each respective Relevant Member State.
Handelsbanken Capital Markets and Nordea Markets represent Hakon Invest and no one else in connection with the share issue and will not be liable to anyone other than Hakon Invest for providing protection which is offered to their clients, or providing advice in connection with the share issue and/or any other matter to which reference is made is this announcement.
Handelsbanken Capital Markets and Nordea Markets assume no responsibility and make no representation or warranty, either expressly or implied, regarding the information provided in this announcement, including its accuracy, its completeness or verification of any other statement which has been made or has been intended to be made by Handelsbanken Capital Markets, Nordea Markets, or on their behalf, in relation to Hakon Invest, the new shares and the share issue, and nothing in this announcement is or shall be relied upon as a promise or representation in this respect, regardless if it concerns the past or the future. Accordingly, Handelsbanken
Capital Markets and Nordea Markets disclaim to the fullest extent permitted by applicable law any and all liability whether arising in tort, contract or any other relationship which Handelsbanken Capital Markets and Nordea Markets otherwise would be found to have in respect of this announcement or any such statement.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that reflect the management's current views on future events, as well as on possible financial development. Although Hakon Invest consider these expectations to be reasonable, there is no guarantee that these forward-looking statements will be shown to be correct. Consequently, the outcome may differ markedly from that stated in forward-looking statements, as a result of various factors. You are encouraged to read this announcement, the prospectus and the information incorporated by reference therein, when these are made available, in their entirety for further discussion of factors that may affect Hakon Invest's future performance and the areas in which it operates. In the light of these risks, uncertainties and assumptions, it is possible that events described in the forward-looking statements in this announcement do not occur.

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