Stockmann would take Lindex to Russia and Ukraine

Stockmann CEO: Seppälä and Lindex are good partners

Hannu Penttilä

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As Helsingin Sanomat reported yesterday, the Swedish fashion chain Lindex is likely to fall into the hands of the Finnish retail group Stockmann, as the offer from the Helsinki-based company topped the bid made by the Swedish competitor KappAhl in August.
     
The total value of the offer amounts to SEK 7,975 million or approximately EUR 870 million.
      The Board of AB Lindex has decided to recommend the shareholders to accept Stockmann’s cash offer of SEK 116 per share.
      According to a press release on Monday, the Board also expects Stockmann to actively contribute to the further development and growth of Lindex in line with the strategy decided by the Board.
     
In recent years, the Swedish chain has been growing strongly in the Baltic states, where the company currently has ten outlets. Lindex’s Baltic operations are handled by the Helsinki-based Lindex Oy.
      The acquisition of Lindex would also give Stockmann an opportunity to expand into Sweden and Norway. Another new area would be the Czech Republic, where Lindex has just opened its first store.
     
Apart from Finland, the common areas for both Stockmann and Lindex include the Baltic countries, in which Stockmann, Seppälä, and Lindex all have a chain of stores.
      However, the most significant reason for the acquisition is reported to be Russia. In addition to Russia, Stockmann plans to take Lindex to Ukraine.
      "The combination of the companies will create an excellent platform to grow, particularly in Russia and in other East European markets, where Stockmann already has a considerable presence with over 4,000 employees currently in the area", said Hannu Penttilä, the CEO of Stockmann, in a statement on Monday.
      Lindex is in a similar strategic position as Stockmann, as both companies are said to be seeking a large share of their future growth from new market areas.
     
In Eastern Europe Stockmann’s Seppälä and Lindex could benefit from each other through joint purchasing and by cooperating in negotiations over point of sale locations at shopping centres.
      With respect to the upcoming transaction, Stockmann estimates that earnings per share for the accounting period ending on December 31st 2008 would be positively affected.


Previously in HS International Edition:
  Stockmann to acquire Lindex for EUR 870 million (1.10.2007)

Links:
  Stockmann
  Stockmann Press Release 1.10.2007
  Lindex

Helsingin Sanomat