HK RUOKATALO AND DANISH CROWN OF DENMARK
HK Ruokatalo Oyj STOCK EXCHANGE BULLETIN, 6 August 2004 at 9.15am
HK RUOKATALO AND DANISH CROWN OF DENMARK PLAN STRATEGIC COOPERATION IN POLAND HK Ruokatalo Oyj and Danish Crown of Denmark, the largest meat company in Europe, plan to launch strategic cooperation in Polands leading meat company, Sokolów S.A. This cooperation was made possible by Danish Crown agreeing to acquire from the Federation of Swedish Farmers (Lantbrukarnas Riksförbund, LRF) a 22.54 per cent shareholding in Sokolów. Sokolóws largest shareholder is HK Ruokatalo, which only in July increased its ownership in the Polish company to 30.10 per cent. The cooperation is intended to take the form of joint ownership through a holding company by the name of Saturn Nordic Holding AB. The plan calls for HK Ruokatalo and Danish Crown to divide the holding companys shareholding on a 50/50 basis. The shareholding agreement has been prepared in a manner that will secure the interests of HK Ruokatalo shareholders. Due to the scope of the cooperation and to Polands stock market legislation, the undertaking must be submitted for approval to both the Polish authorities and EU competition authorities. Under the provisions of Polish stock market legislation, a holding company acquiring a majority shareholding is required to make a public purchase offer to all other shareholders. Should the redemption price of Sokolów shares rise too high, the holding company may divest its majority shareholding. LRF has today announced its intent to sell its shares in HK Ruokatalo to Danish Crown. LRF has been a HK Ruokatalo shareholder since 1998. Its shares correspond to 10.14 per cent of HK Ruokatalo share capital and 2.04 per cent of the votes. HK Ruokatalo CEO Simo Palokangas and Danish Crown CEO Kjeld Johannesen are both convinced joint ownership will promote the favourable development of Sokolów. In recent years, this leading Polish meat company has invested heavily in the future with the support of e.g. the European Bank for Reconstruction and Development, and it is under experienced and professional management. The extensive industrial expertise of the cooperation partners would enable both to contribute distinct value added to the further development of Sokolów. As the largest Sokolów shareholder, HK Ruokatalo believes the involvement of Danish Crown will only strengthen Sokolóws operating conditions. Simo Palokangas notes HK Ruokatalo has for some time now been seeking a strategic partner on the international market. Cooperation with Danish Crown will bolster the standing of HK Ruokatalo on the European meat market. Palokangas considers Danish Crowns acquisition of shares in HK Ruokatalo a positive development. The Danish company shareholding will not impact on the status of other HK Ruokatalo shareholders, nor will it cause any change in the companys raw material procurement principles. According to CEO Kjeld Johannesen, Danish Crown does not intend to increase its shareholding in HK Ruokatalo beyond the level now announced. Danish Crown, a cooperative society owned by some 20,000 Danish farmers, is the largest meat company in Europe. Its turnover in 2003 was EUR 5.4 billion. The company has some 23,000 employees and operates production facilities in several countries besides Denmark. It has several well-known subsidiaries including Tulip and Plumrose. A leading meat exporter, Danish Crown pork and beef as well as processed meats are sold the world over. Quoted on the Warsaw Stock Exchange, Sokolów S.A. is the Polish market leader in the meat business with a particular focus on pork but also a strong presence in the beef and poultry market. Furthermore, it is the only Polish company to operate nationwide. In 2003, Sokolów had a turnover in excess of EUR 233 million. It has some 3,400 employees. The company, which has implemented an intense development programme in recent years, has six production facilities in various parts of Poland. All facilities have either been built or fully modernised within the past decade and have been export approved by both EU authorities and the United States Department of Agriculture (USDA). HK Ruokatalo counts among the largest meat companies in the Baltic region. The company has expanded in line with its internationalisation strategy, initially branching out from Finland to Estonia, Latvia and Lithuania. HK Ruokatalo has been a shareholder in the Polish Sokolów since late 2002 and its 30.10 per cent holding makes it currently the companys largest shareholder. HK Ruokatalo is also active on the export market in Japan, South Korea, Russia and the United States, among others. Its particular strengths are pork and poultry products, especially fresh consumer products. The Groups turnover in 2003 amounted to more than EUR 647 million. At the end of June, company employees in Finland numbered 3,300 with an additional 2,000 employees in the Baltics. Please consult company websites for further company information: www.hk-ruokatalo.fi www.danishcrown.dk www.sokolow.pl HK Ruokatalo Oyj Simo Palokangas CEO DISTRIBUTION: Helsinki Exchanges Main media www.hk-ruokatalo.fi