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Axfood’s acquisition of Bergendahls Food and partnership with City Gross approved by the Swedish Competition Authority

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The Swedish Competition Authority today cleared Axfood’s acquisition of the wholesale business Bergendahls Food as well as of the minority position in City Gross which is part of a strategic partnership. The acquisition creates economies of scale and synergies, and through greater efficiency and improvements in the assortment and logistics, the deal will also benefit wholesale customers and Swedish consumers.

“This is welcome news entailing that we soon can start the integration process for our businesses,” comments Klas Balkow, President and CEO of Axfood. “The deal lays the foundation for continued growth, and through larger volumes, improved purchasing power and more efficient solutions we can strengthen our offering, which will benefit all parties involved as well as Swedish consumers. In addition, the deal will lead to benefits for City Gross, which through the partnership will gain even better opportunities to challenge and strengthen its position in the hypermarket segment.”

On 31 May 2021 Axfood announced that an agreement had been reached with Bergendahl & Son AB (“Bergendahls”) to acquire 100% of Bergendahl Food AB (“Bergendahl Wholesale”). In addition, as part of a strategic partnership, Axfood will acquire a minority stake corresponding to 9.9% of the shares in City Gross Sverige AB (“City Gross”) with an option to increase its total shareholding to 30%. The initial consideration amounts to
SEK 1.8 bn on a cash and debt-free basis, and upon full exercise of the call option, the total consideration amounts to SEK 2.5 bn, of which SEK 1.5 bn pertains to Bergendahl Wholesale. The transaction is expected to create annual cost synergies of approximately SEK 200 m that are expected to be realized successively through 2025. Excluding integration and transaction costs, it is expected that the acquisition will make a positive contribution to Axfood’s earnings per share from 2022.

Completion of the deal was subject to approval by the Swedish Competition Authority, which today announced that its review has been completed and that the deal has been cleared. The decision was reached after Axfood made certain voluntary undertakings with respect to wholesale customers pertaining to extensions of contracts with existing terms and with respect to certain new actors which shall have the right to sign delivery agreements with Axfood.  The transaction will be carried out on 1 October this year.

The integration between Bergendahl Wholesale and Axfood’s purchasing and logistics company Dagab will begin once the transaction has been completed. City Gross will continue to be a standalone grocery chain, but will be integrated with Axfood’s IT infrastructure and will be supported by the new, coordinated purchasing and logistics operation in Dagab through a 15-year delivery and cooperation agreement that is part of the partnership. In Axfood’s financial reporting, Bergendahl Wholesale will be included in the Dagab segment. The minority stake in City Gross will be reported in accordance with the equity method in the Willys segment, in which Willys Hemma and Eurocash are also reported.

As previously communicated, in the short-term the acquisition will be financed through a combination of existing cash and credit facilities. To maintain a strong financial position over time, Axfood intends to carry out a new share issue of SEK 1.5 bn with preferential rights for existing shareholders. Axfood’s Board of Directors has decided to adjust the timing of the issue to Axfood’s capital structure and capital requirements, with respect to among other things investments in automation in the logistics operations. Instead of carrying out the issue during the fourth quarter of 2021 as previously communicated, a proposal will be made to Axfood’s Annual General Meeting on 23 March 2022 to authorize the Board to decide on a new issue of shares for implementation in 2022. Axfood’s largest shareholder, Axel Johnson AB, which represents 50.1% of the shares, has undertaken to vote in favour of the Board’s proposal and to subscribe for its pro rata share in the rights issue.

As previously communicated integration and transaction costs related to the acquisition are estimated to approximately SEK 200 m during the period 2021-2023. Acquisition costs of SEK 54 m were reported for the second quarter of 2021. Acquisition and integration costs are estimated to be approximately SEK 20 m in the third quarter of 2021 and approximately SEK 20 m in the fourth quarter of 2021.

Further information about the transaction can be found in Axfood’s press release dated 31 May 2021.

For further information, please contact:
Magnus Törnblom, Director Press Relations Axfood, +46-70-266 27 12, magnus.tornblom@axfood.se 

Alexander Bergendorf, Head of Investor Relations Axfood, +46-73-049 18 44, alexander.bergendorf@axfood.se



Axfood aspires to be the leader in good and sustainable food. Our family of companies includes the store chains Willys and Hemköp as well as Tempo and Handlar’n. B2B sales are handled through Snabbgross, and our support company Dagab is responsible for the Group’s product development, purchasing and logistics. The Axfood family also includes Mat.se, Middagsfrid and Urban Deli as well as the partly owned companies Apohem and Eurocash. Together the Group has more than 11,000 employees and sales of more than SEK 53 bn. Axfood has been listed on Nasdaq Stockholm since 1997, and the principal owner is Axel Johnson AB. Read more at www.axfood.com.