Kesko to invest in Finland by acquiring Suomen Lähikauppa -Siwa and Valintatalo stores return to Finnish ownership

KESKO CORPORATION STOCK EXCHANGE RELEASE 18.11.2015 AT 09.00 1(3)

Kesko to invest in Finland by acquiring Suomen Lähikauppa -Siwa and Valintatalo stores return to Finnish ownership

Kesko Corporation's subsidiary Kesko Food Ltd has made an agreement to acquire the whole share capital of Suomen Lähikauppa Oy from the private equity investment firm Triton. The net sales of Suomen Lähikauppa in 2014 were €999.2 million, it has 643 Siwa and Valintatalo stores and 4,100 employees. The transaction price of the debt-free acquisition, structured as a share purchase, is approximately €60 million.

"In line with its strategy, Kesko is seeking growth in the grocery trade. One of the focus areas for growth is to increase and renew the neighbourhood store network. We want to develop the accessibility, quality and price competitiveness of neighbourhood retail services that suit Finnish consumers. At the same time, the transaction will enable significant synergies. Suomen Lähikauppa has excellent business locations and the acquisition will enable us to implement our strategy faster than planned and with significantly lower capital expenditures. Competition in the Finnish grocery trade is tough and the weakening of consumers' purchasing power has intensified it," says Kesko's President and CEO Mikko Helander.

Suomen Lähikauppa has concentrated on grocery stores located close to customers. In 2014, Suomen Lähikauppa's net sales were €999.2 million and loss before tax was €11.6 million.

"We have a long established focus on neighbourhood retailing and we possess special expertise and experience in this market. The transaction will enable Finnish neighbourhood retailing to be developed and it will open up significant new opportunities to serve Finnish consumers. This is definitely a good alternative also for Suomen Lähikauppa," says Ralf Holmlund, President and CEO of Suomen Lähikauppa.

Kesko has specified its capital expenditure plan for the upcoming years further, taking account of the acquisition to be completed, as well as the continuously challenging general economic situation, especially in Finland and Russia. Kesko estimates that its capital expenditure in 2015-2017 will decrease from the approximately €1 billion announced in the strategy to €750 million, excluding possible acquisitions.

The completion of the acquisition is subject to the approval of the Finnish Competition and Consumer Authority and the fulfilment of the other terms and conditions of the transaction. The handling of the matter and the acquisition are expected to be completed in the first half of 2016.

Briefing in Finnish at Kesko today at 11.00 (Finnish time)
Kesko will hold a briefing on the acquisition today, Wednesday, 18 November 2015 at 11.00 (Finnish time) in the auditorium at Ankkurikatu 5, Helsinki (Katajanokka). The briefing can be viewed on webcast at www.kesko.fi.

Audio conference in English today at 14.30 (Finnish time)
An English-language audio conference on the acquisition will be held today at 14.30 (Finnish time). The audio conference login is available at www.kesko.fi.

Further information:
Jukka Erlund, Chief Financial Officer, tel. +358 105 322 113
Jorma Rauhala, Senior Vice President, grocery trade, tel. +358 105 322 211
Lauri Peltola, Senior Vice President, corporate responsibility, communications and stakeholder relations, tel. +358 105 322 400


Kesko is a Finnish listed trading sector company. Kesko operates in the grocery trade, the home improvement and speciality goods trade and the car trade. Its divisions and chains act in close cooperation with retailer entrepreneurs and other partners. In 2014, Kesko's net sales totalled €9.1 billion and it employed nearly 20,000 people. Kesko has over 1,500 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia and Belarus. Kesko's shares are listed on Nasdaq Helsinki. The company's domicile and main premises are in Helsinki. Kesko is the fifth most sustainable company in the world (The Global 100 Most Sustainable Corporations in the World). www.kesko.fi

Suomen Lähikauppa concentrates on neighbourhood services. We take care of the needs of residents in the neighbourhood, we bring together services and provide a good service experience - readily, conveniently and fast. Suomen Lähikauppa has two nationwide store chains: Siwa and Valintatalo. The network of Siwa stores is Finland's most comprehensive. www.lahikauppa.fi

The Triton funds invest in and support the positive development of medium-sized businesses headquartered in Northern Europe - with a focus on Germany, Switzerland, Austria and the four Nordic countries: Denmark, Finland, Norway and Sweden. Within this European region, Triton focuses on businesses in the Industrial, Business Services and Consumer/Health sectors.

Triton seeks to contribute to the building of better businesses for the longer term. Triton and its executives wish to be agents of positive change towards sustainable operational improvements and growth. The 30 companies currently in Triton's portfolio have combined sales of over €14 billion and more than 60,000 employees. The Triton funds are advised by dedicated teams of investment professionals based in Germany, the Nordics, the United Kingdom, Luxembourg, Jersey, Italy and China. For further information: www.triton-partners.com

Kesko Corporation

Merja Haverinen
Vice President, Group Communications

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