Menu Search

Company Announcements

Skel fjarfestingafelag hf

SKEL fjárfestingafélag hf.: Merger Talks with Samkaup terminated

Source: GlobeNewswire
SKEL fjárfestingafélag hf.: Merger Talks with Samkaup terminated

Reference is made to earlier announcements on 19 January, 22 March, 15 May and 9 September 2024, regarding the merger negotiations between SKEL fjárfestingafélag hf. ("SKEL") and Samkaup hf. ("Samkaup"), reg. no. 571298-3769, involving the merger of Samkaup with certain companies within the SKEL group, specifically Orkan IS ehf., Löður ehf., Heimkaup ehf., and Lyfjaval ehf. (the "Merging Companies"). Heimkaup operates the stores Prís, Extra, and 10-11, and holds stakes in Brauð & Co. and Sbarro.

In recent months, SKEL has engaged in merger discussions with Samkaup, as previously announced. During this process, due diligence was conducted, along with an evaluation of the operational prospects and the potential structure of the merged company. Both parties concluded that a merger could be advantageous, presenting a significant opportunity to achieve synergies.

However, Samkaup has encountered operational difficulties this year, as have the food-related divisions of Heimkaup, as was reflected in SKEL's financial results for the first half of the year. SKEL demanded that Samkaup's shareholders would inject additional equity into the company prior to the merger. Samkaup’s board rejected this demand and announced the termination of the negotiations.

Ásgeir Helgi Reykfjörð Gylfason, CEO of SKEL:
"We have invested significant time and effort in establishing a third major player in the Icelandic retail market. It is disappointing that financial conditions did not support this project at this time. We believe that consumers are calling for innovation in the grocery sector, as demonstrated by the recent opening of Prís. Simply put, we believed it was fair and appropriate to reduce the operational risk of the merged company by injecting additional equity, but this was not agreed to. Throughout the process we believe that all parties acted with integrity, and we wish Samkaup success in its future endeavors. SKEL, as an indirect 5% shareholder in Samkaup, will continue to monitor the company's development closely."