Strategy to be a pure consumer-branded company, and this is an important step in the implementation of that strategy. With this transaction, we are engendering a Norwegian industrial locomotive in the groceries industry, with a potential for expansion in important international markets. In this, Orkla is going to be well-prepared to meet the competition from the large multinational competitors in the global market.
Personally, I would say that I'm very proud and very humble for the confidence that we're being shown in being able to acquire Rieber & Søn, having the opportunity to expand many of the company's consumer-branded goods further.
This is a company that I know well, and I followed along with it for many decades, and I've admired it for a very long time. Through the ability to define the good taste in a number of products. For many years, Rieber has developed strong brands and positions.
In Norway, it's Toro products that are in the categories such as sauces, soups, and ready-made products. In Czechia, it's the Czech Republic, it's Vitana, Frödinge is important in Sweden for cake mixes and desserts. We have also strong mustard brand in Denmark.
With the motivated and competent workers at every step of the way, Rieber will be a wonderful partner for Orkla, and it's on its way to being a focused branded consumer goods company. The companies have the same value base, and they are a good fit as far as competence, category, and technology are concerned. These are two strong organizations that are now going to be merging.
We both are living in a market where we meet competition from all of the leading multinational competitors. I'm very enthusiastic with a view to the branded consumer goods company we're now creating.
This strengthening that we have for our strategy and our pure play strategy, in particular, gives us many opportunities for expansion. I would like to take this opportunity to express my gratitude, especially to you, Fritz, for very good and constructive negotiations that have led to a result that I think we can both say that we're satisfied with.
I'd like to also thank you, Åge, and the rest of the Orkla team, for a formidable effort that you've made in connection with this. I'll give the floor to you, Fritz, who'll be speaking on behalf of the family.
Thank you. It's with very mixed feelings that the Rieber family has chosen to sell, and we feel that Orkla will be the best owner of the business activities of Rieber & Søn at this point. Giving up the ownership of an enterprise that has been owned by the family for more than 173 years is not done easily.
As the main owner of Rieber & Søn, we are of the opinion that Orkla ASA, that we see the contours of now, is going to be something that's very good. It'll be a good parent for our activities. Orkla, as a company, has a long heritage, and the fact that they can continue the development of our activities in the Nordic countries and Central Europe, based on Norwegian value standards and attitudes, this has been very important to the decision that we've come to.
Being able to contribute to making a strong Nordic branded goods company, a food manufacturer that can compete with major global food players, will be very positive, both for our customers, employees, consumers, and owners.
This sale to Orkla is taking over a company that is in very good shape, and I think in particular, that we're seeing that the areas where Orkla has lacked critical mass, you'll see that it'll be a new spring for you. This means that there'll be new products, new opportunities that will be a part of Orkla. Having a good position in our home market is absolutely decisive for growing outside this area. These good positions that we have can be further developed. Rieber & Søn has executives and employees that will certainly be successful in the new company.
As Stein Erik said, Rieber is an ideal partner for Orkla. As regards the value of shares in Rieber, I think that there's been a fair price here. We've had a lot of people who companies that have been interested, but we have chosen a Norwegian group. There's been negotiations that have led to a result that I believe also the other shareholders are going to be very satisfied with. The partners have had good respect, mutual respect for each other. This would not have been possible without the work that Stein Erik has done to build up confidence, and in actual practice, Åge Korsvold has continued these efforts in recent weeks, and we feel very confident that that will be the case in continuation.
Thank you, and I'm going to say a little bit about the transaction.
What we have done is that we have bought the Rieber family shares, that's 90.11% of the share capital, and having done that, we will have full control of the company. We are paying somewhat more than NOK 66 per share. This means that on a debt-free basis, we then assessed Rieber at NOK 6 billion. We're paying a good price, and these are good companies, and you're going to pay a good price for this. We have no problem with accepting this. This is a value creation transaction for Orkla. It meets all of our requirements for returns, and it's accretive. Why are we doing this then? Well, we're doing this because Rieber has a number of very strong number two and number one and number two positions in the Nordic markets.
We, Orkla, will get market positions in the Nordic countries and outside of the Nordic countries that are interesting and which we're going to build on further. They'll widen the geographical catchment area for the group as a whole. We are two organizations that are really surprisingly, I'd have to say, complementary. These are two companies that are based on local tastes, but as far as technologies and products are concerned, we're very complementary. Together, we'll have a very broad, strong company. We're two companies that live in an international situation of competition. We need economies of scale, lower costs, and resources to be able to engage in innovation. The requirements for being competitive in competition with the international players, this is something that we're improving through what we're doing now.
Rieber & Søn is a competent company, and we are going to continue the many strong aspects of this company. This is a transaction where I'm very pleased to say that the synergies, when it comes to the incomes, is going to be more, even greater than on the cost side. We're going to continue all of Rieber and everything that's good in Orkla in this merged company. I believe naturally also that a strong Norwegian, innovative, and competitive Nordic food manufacturer is going to be good for the industry and good for the consumer. Thank you.
Thank you. I need a microphone, please. My name is Håkon Mageli, and I'm responsible for communications at Orkla. What we plan to do now is that we're going to have a Q&A session where you can ask your questions, so that my task is really just to help you through that. Who would like to be the first person? Right there. Oh, you need the microphone.
I'm the editor in the grocery magazine. Could you say something about why it is that the industry will benefit from this? Would you be a little bit more detailed?
The answer, Mr. Korsvold said, is that the industry needs strong suppliers. They need innovation today, in today's situation, is resource intensive. More questions?
Could I have the microphone again, then, please? Question: I assume that the competition authorities might have some ideas about this, Mr. Hagen, could you answer that, or is this already clarified?
Mr. Hagen, no, this has not been clarified. As it says in the press release, this is based on the approval of the EU authorities, as Mr. Korsvold just mentioned, there's not very much overlapping on the product side, so that I don't think that there should be any really great problems that we would encounter there.
DN, question: Can you tell us who it was that started the talks? Who initiated that? That's really the question that I had. Who was it that made the first move?
This process started with me taking the initiative and talked to Fritz Rieber, says Mr. Korsvold.
Thank you. We've been told that there wasn't any auction here with the sale. Can you say something about that?
As we announced in February, we said that we were looking for a financial partner. We feel that the solution that we've now arrived at is the best solution for everyone, for the stakeholders and the employees and so on. In a situation like this, we felt that it would be wrong to auction off the company.
Nordea Markets, question. A question about synergies. This may be early, but perhaps, well, these are companies that know each other well. Can you say something about the cost synergies and what thoughts you have about that, both in terms of money and time?
Mr. Korsvold, answer: We don't want to say anything about the synergy amounts today. What I can say is that when we have assessed Rieber, we have assumed that Rieber very quickly will come back to a level of profits that they had in 2010. Then they had an EBITDA of NOK 642 million.
Handelsbladet Magazine FK. You have said yourselves that it is surprising how little overlap there is in the product portfolios of the two companies, and that this is something that the industry should really benefit from. I'm not sure that we think that way, those of us who are sitting on the other side of the road here in the grocery stores. Would this have consequences then for the Norwegian grocery industry? Will we notice this in the industry? I certainly hope so, and I hope it'll be an improvement. That's definitely our ambition. Please say a little bit more about that than just saying, yes.
Mr. Hagen, as a former grocer, I can certainly say a little bit about that. I have a little bit more experience than Mr. Korsvold with that.
That is that the industry is well-served by having strong suppliers of consumer-branded goods that have the resources to engage in innovation, develop new products in different ways that generate profitability. This is what is really important. For many years ago, I went out and complained about Orkla, for example, that didn't have enough innovation. We depended on having suppliers that were innovative and that could create strong branded goods, that is a prerequisite for engaging in profitable grocery activities, I am convinced that our friends on the other side of the street, the grocery stores here, will certainly also benefit from this.
Question, Angela. Question about geography. Rieber & Søn operates in Eastern European activities, where Orkla has not been exposed so much or had activities recently in consumer goods, but more on the ingredient side. Are you going to be exiting some of the markets that you're in today?
Mr. Korsvold, answer: It's a little bit early to be very specific, but naturally, Rieber's position in the Czech Republic is very interesting. We're going to be following that up, and that market will be given resources so that we can strengthen our position there. We would like to continue the situation, the positions in Russia. Obviously, in principle, the extent of geography, the geographical activities is something that's a plus for Orkla, but we aren't sure yet how we're going to be dealing with it. We'll have to come back to this when we've learned more about those business operations. Last chance. Any more questions?
This is from Dagens Næringsliv, Norway's financial newspaper. You are taking over Rieber, that's had some heavy going with the loss of market share and so on. What is it that you can do that Rieber hasn't been able to do?
Mr. Korsvold, answer: First of all, I would say that Rieber, things go up and down here in this world. We feel that Rieber is a strong company. We feel that even though there have been some. Even though the figures haven't always been as good as we could have wished in recent years, Rieber still has a very good position, a strong position. It hasn't changed. We feel very confident that the positions are strong and good. I believe, as I mentioned a moment ago, this is a very competitive market, extremely competitive market.
Resources are very important here. We share then the opinion that the Rieber family has arrived at, that having a well-funded, good-branded consumer goods company, that this will be something that will benefit Rieber, too. This is a question of innovation, costs. All of these different aspects of competitiveness are decisive for this. I would say it's not Orkla alone that's going to create this. This is something we're going to accomplish together.
One more question: Can you say something about the process? Who has been your advisor? Who have been your advisors there?
Shall I answer that, says Mr. Korsvold. I can answer that, says Mr. Korsvold. ABG Sundal Collier has been the financial advisor for Rieber, and Orkla did this without external or independent advisors.
Question: How has the process taken place over time? Can you give us something about the time frame?
Mr. Korsvold, answer: I took the initiative to Fritz Rieber before the summer, we have then talked during the summer, we've had negotiations after the end of summer. That is what has led then to this agreement that we signed yesterday evening.
Mr. Hagen, I would add that we have a unanimous board and a unanimous corporate assembly that are behind this decision.
Question: The corporate assembly has been oriented, Mr. Hagen?
Well, they're not just informed. We feel that this is such a large transaction, if we look at our balance sheet and so on, that this is something that we had to then take it up for a vote in the corporate assembly. There was a meeting of the corporate assembly late yesterday evening. Question?
The managing director of Rieber, I don't remember her name. She left a few works, weeks ago. I assume perhaps that has something to do with this. How is the, how are the employees at Rieber feeling about this now?
This was a question to Mr. Mohn, I believe. I can say that you're not right. These two things do not, they're not connected, and she did not know about the negotiations or the outcome. The, the news was received this morning at Rieber, and I think there is a little bit sitting on the fence to see what happens. A lot of people see good opportunities, and a lot of people need a little bit more time to digest this, so that I would certainly like to revert to this question again at a later time.
That appears to be all the questions that we have, says Mr. Mageli. We will have, you'll have the opportunity for one-to-one interviews. I will coordinate Stein Erik Hagen, and Rune Helland will coordinate Åge Korsvold. Our gentleman from Bergen will be coordinating our two friends from Rieber, so that it's the first to get here. Hagen first. Thank you very much for this.