Orkla Foods to take over Kåkå and sell Regal Mølle

Orkla Foods is acquiring the marzipan and bakery ingredients supplier KåKå from the Swedish company Cerealia and selling its Norwegian flour mill Regal Mølle to Cerealia. Orkla will also receive a cash payment of approximately NOK 150 million. The deal will give Orkla an accounting gain of approximately NOK 100 million, which probably will be taken to income in the second four months of 1999.

With the acquisition of KåKå, Orkla Foods is establishing a Nordic business for bakery ingredients. The takeover of KåKå will enable us to develop our bakery activities and achieve economies of scale throughout the value chain. In the short term, the takeover will lead to a slight decline in operating profit, while in the longer term, synergy and growth potential will increase, says Managing Director Bent Fuglesang of Orkla Foods. He emphasises that Regal Mølle is getting a good owner who will further develop the company on the Norwegian market. Cerealia owns Sweden's largest milling business, Nord Mills, and holds strong market positions in Denmark and Finland.

KåKå is a leading marketer and distributor of a wide range of bakery products in Sweden. The company owns two production plants, in Helsingborg and Ørnskjøldsvik. Maltcentralen, KåKå's Danish company, is a leading supplier of raw materials and semi-finished products. KåKå also includes the Czech company Sedba Baking.

KåKå's annual turnover totals NOK 1.2 billion, and the workforce is equivalent to about
300 man-years. Regal Mølle has an annual turnover of NOK 620 million, and a workforce equivalent to some 190 man-years.

With this acquisition, Orkla Foods' Industry Division becomes the clear market leader for bakery ingredients in the Nordic region. Idun Industri (Norway), KåKå (Sweden) and Odense Marcipan and Maltcentralen (Denmark) together comprise a strong Nordic business system. By exchanging products and know-how, the companies will be further developed to serve customers in the Nordic region.

After the takeover, Orkla Foods' Industry Division will generate an estimated annual turnover of NOK 2.4 billion and have a workforce equivalent to 750 man-years.

The acquisition is subject to the approval of the relevant authorities in Norway and Sweden.

Orkla Foods' annual turnover amounts to approx. NOK 9.4 billion, and the workforce is
equivalent to 5,700 man-years. The company comprises Stabburet, Procordia Food, Beauvais, Felix Abba, the International Division, Abba Seafood, the Industry Division and Bakers.