Swedish retailer ICA Gruppen announced that its acquisition of UAB Palink, which operates Lithuania's IKI grocery store chain, has been conditionally approved by the country's competition authorities.
ICA signed an agreement to acquire UAB Palink in December 2016 for €213 million, however, the Lithuanian Competition Authority had raised concerns about certain geographical areas.
Earlier this month, ICA proposed the sale of 17 of its Rimi stores in Lithuania, to facilitate the merger.
Now, the Lithuanian Competition Authority has given its clearance for the deal to proceed, under the condition that these 17 stores be sold prior to completion of the transaction.
ICA says that its ambition is to close the deal before the end of the year, however, it could be delayed until the first quarter of 2018.
Strategic Acquisition
The Swedish retail group says that the divestments are not expected to materially affect the overall value creation of the acquisition.
Rimi currently operates just under 60 stores in Lithuanian, and the 17 stores that will be divested accounted for €49 million in net sales during 2016.
Meanwhile, IKI is the second-largest player in the Lithuanian grocery market, with a retail network of around 230 stores nationwide. For the full year 2016, IKI's sales amounted to €632 million, with EBITDA of €33 million.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
