Finnish anti-monopoly authorities have given the green light for the retail giant Kesko to acquire its competitor Suomen Lähikauppa Oy, in a move which would bring the number of major players in the Finnish grocery market down to three.
The Competition and Consumer Authority, KKV, on Monday paved the way for the acquisition to go ahead, after Kesko announced last November that it had agreed to purchase Suomen Lähikauppa – who own the Siwa and Valintatalo chain of local food stores - from private equity investment firm Triton for a debt-free sum of 60 million euros.
Suomen Lähikauppa’s 643 Siwa and Valintatalo grocery stores operated at a loss of 11.6 million euros in 2014, with 999.2 million euros in pre-tax sales revenue.
The Triton funds are advised by investment professionals in Germany, the Nordics, the United Kingdom, Luxembourg, Jersey, Italy and China.
The competition authority’s decision opens the gates for the grocery chains to return to Finnish ownership, giving Kesko a market share of approximately 40 percent. Kesko’s competitor, S-Group, owns around a 46 percent share, while Lidl stores make up just under 8 percent of the market in Finland.
However the authority imposed conditions, including that Kesko sell off 60 of its newly acquired stores to competitors, and that they continue using Suomen Lähikauppa’s wholesalers for a fixed period.
However, if a buyer for the stores cannot be found, Kesko can decide for itself whether to close the stores down, the KKV’s head, Juhani Jokinen, said.
The KKV ruled that Lähikauppa’s economic position meant it would soon have disappeared from the Finnish market nonetheless. Other buyers were not on the horizon, the authority said.
Kesko has more than 1,500 stores across the Nordics, the Baltic region and in Russia and Belarus and employs nearly 20,000 people. The conglomerate's net sales in 2014 amounted to some 9.1 billion euros.