Esselte's acquisition of Leitz now approved and finalized

Esselte's acquisition of Leitz now approved and finalized Deutsche Kartellamt, the German antitrust authority, has approved Esselte's acquisition of the Leitz Group. After receiving this regulatory approval, Esselte can now finalize one of the largest acquisitions in the international office products industry through Esselte Office Product's purchase of Germany's biggest manufacturer of office supplies. The acquisition strengthens Esselte Office Product's leading position in Europe and fulfills the company's strategy to become the leading international supplier. "Leitz is a successful company with a very strong position in Germany where Esselte has been weak. The company is an excellent fit with Esselte," comments Robert Scribner, President and CEO of Esselte Office Products. The acquisition of Leitz is an important prerequisite for reaching the financial targets that have been set for Esselte Office Products. These goals include annual sales growth of at least 10 percent and an operating margin of 8 percent by 2001. Esselte Office Products is also to reach a return of 20 percent on capital employed by 2001, while cash flow is to exceed SEK 1 billion, excluding acquisitions, already by 2000. Esselte's acquisition analysis is based on the following financial data, among other factors: The acquisition cost, including the assumption of debts from Leitz, is DEM 600 million. Acquired capital employed totals approximately DEM 300 million. Leitz's annual sales total approximately DEM 570 million and the operating margin is 6 percent. Goodwill is estimated to total DEM 360 million and will be amortized over a period of 20 years. "We will now integrate the two organizations to achieve the greatest possible efficiency and strengthen market positions. We expect to achieve annual synergistic benefits in the order of DEM 45 million in two years. Leitz is a highly efficient company with good margins, which will benefit the new combined entity," ends Robert Scribner. "The acquisition of Leitz will make Esselte Office Products a stronger company and a leading global player in this industry," comments Esselte CEO Jan Kvarnström. "After we spin off Meto next year, the Esselte name will be synonymous with Esselte Office Products, which will then be a company concentrating exclusively on office products with a clear focus and strong market positions. This will complete the concentration strategy that we have been implementing for the last year," ends Jan Kvarnström. The Esselte Group consists of two independent business areas - Esselte Office Products and Meto - which are global market leaders in office products and labeling systems, respectively. The Parent Company, Esselte AB, focuses on creating added value by being an active owner and implementing structural measures to streamline operations. Nielsen & Bainbridge is being divested, and after the business area is sold, Esselte Group sales will amount to approximately SEK 11.7 billion and the number of employees will total 7,800 (based on 1997 figures). For further information contact Bengt Wikander, Senior Vice President, Corporate Communications, Esselte AB. Phone +46 8 545 21 900 (switchboard), +46 8 545 21 904 (direct line) or +46 70 892 24 31 (mobile phone). ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1998/11/19/19981119BIT00150/bit0001.doc http://www.bit.se/bitonline/1998/11/19/19981119BIT00150/bit0002.pdf