Statement by the Board of Directors of ICA Gruppen in relation to the public offer by ICA-handlarnas Förbund and AMF

The Board of Directors of ICA Gruppen[1] has unanimously resolved to recommend the shareholders of ICA Gruppen to accept the public offer made by ICA-handlarnas Förbund and AMF[2].

This statement is made by the Board of Directors of ICA Gruppen AB (publ) (“ICA Gruppen”) pursuant to section II.19 of Nasdaq Stockholm’s Takeover Rules (the “Takeover Rules”).

The Offer

ICA-handlarnas Förbund and AMF Pensionsförsäkring AB (”AMF”), have today, 10 November 2021, through Murgröna Holding AB (publ) (“BidCo”), announced a public offer to the shareholders of ICA Gruppen to sell all their shares in ICA Gruppen to BidCo for a cash consideration of SEK 534 per share in ICA Gruppen (the “Offer”). BidCo has stated that the consideration in the Offer will not be increased.

The total value of the Offer, based on all 92,503,465 shares in ICA Gruppen that are not directly or indirectly held by BidCo or by its closely associated parties and based on the offer price of SEK 534 per share, amounts to approximately SEK 49.4 billion. The Offer entails that the shares in ICA Gruppen are valued to approximately SEK 107.4 billion (based on all 201,146,795 shares in ICA Gruppen, i.e., including the shares that ICA-handlarnas Förbund already owns, and based on the offer price of SEK 534 per share).

The acceptance period for the Offer is expected to commence on 11 November 2021 and expires on 14 December 2021, subject to any extensions.

Completion of the Offer is conditional upon, among other things, the Offer being accepted to such extent that BidCo becomes the owner of more than 90 per cent of all shares in ICA Gruppen (on a fully diluted basis), and the receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions (including from the Swedish Financial Supervisory Authority) in each case on terms that are acceptable to BidCo and AMF. BidCo has reserved the right to waive, in whole or in part, one or more of these and the other conditions for completion of the Offer.

For further information about the Offer, please refer to BidCo’s press release with the announcement of the Offer which was made public today, 10 November 2021, and the offer document which BidCo intends to make public on the same date. These documents are available at BidCo’s website (www.murgrona-offer.com) and through a link at ICA Gruppen’s website.

The Board of Directors’ process to evaluate the Offer

BidCo is owned by ICA-handlarnas Förbund, which is the parent company of ICA Gruppen. ICA Gruppen’s Board members Claes-Göran Sylvén, Bo Sandström, Magnus Moberg and Anette Wiotti are not independent in relation to ICA-handlarnas Förbund and have not participated, and will not participate, in ICA Gruppen’s preparations of matters related to, and evaluation of, the Offer. The other Board members of ICA Gruppen, i.e., Cecilia Daun Wennborg, Lennart Evrell, Andrea Gisle Joosen, Fredrik Persson, Charlotte Svensson, Jonathon Clarke and Magnus Rehn, are independent and have participated or will participate in ICA Gruppen’s preparation of matters related to, and evaluation of, the Offer.

The Board of Directors of ICA Gruppen has, following written request, allowed BidCo to conduct a very limited confirmatory due diligence review in connection with the preparations of the Offer. BidCo has not received any inside information in connection with such due diligence review.

ICA Gruppen has retained Carnegie Investment Bank AB (publ) as financial advisor and Cirio Advokatbyrå AB as legal advisor in connection with the Offer.

Since BidCo is owned by ICA-handlarnas Förbund, which is the parent company of ICA Gruppen, Section III of the Takeover Rules is applicable to the Offer. ICA Gruppen´s Board of Directors has therefore obtained a fairness opinion regarding the shares in ICA Gruppen, from an independent expert, namely Deloitte AB (“Deloitte”), according to which the Offer is deemed fair for ICA Gruppen’s shareholders from a financial perspective (subject to the assumptions and considerations set out in the opinion) (the “Fairness Opinion”). The Fairness Opinion is attached to this statement. Deloitte receives a fixed fee for providing the Fairness Opinion which is not contingent upon the size of the offer consideration or acceptance level in the Offer or whether the Offer is completed.

The Board of Directors’ assessment

ICA Gruppen is a leading retail company, and its various business operations have, as of today, leading positions in each segment. ICA Gruppen has a strong financial position, and its operations generate strong cash flow over time, which enables reinvestments in its business whilst maintaining a good and stable return for its shareholders. Furthermore, ICA Gruppen’s group structure enables continued long term and sustainable growth.

To evaluate the Offer, the Board of Directors has taken in consideration the risks associated with ICA Gruppen’s ability to maintain growth, profitability, and its position in the market. The retail market is experiencing changes such as increased competition, new consumer patterns and a digital transition. Given these market trends, it is the Board of Directors’ opinion that ICA Gruppen becomes more competitive with a simplified corporate structure, as an unlisted company controlled by ICA-handlarnas Förbund. To enable ICA Gruppen’s future growth and to retain its profitability in an evolving market, certain investments in the business are required. These investments, paired with selected strategic initiatives, are required to strengthen ICA Gruppen’s offer and competitiveness in the market.

The Board of Directors notes that the Offer represents a premium of 11 per cent compared to the closing price of SEK 480.7 of the ICA Gruppen share on Nasdaq Stockholm on 9 November 2021, which was the last trading day prior to the announcement of the Offer, and a premium of 23 per cent and 25 per cent, respectively, compared to the volume weighted average price per ICA Gruppen share on Nasdaq Stockholm during the 30 and 90 latest trading days, respectively, up to and including 9 November 2021. The Offer also exceeds price targets from all leading equity research analysts before the publication of the Offer.[3]

In its evaluation of the Offer, the Board of Directors has also considered that ICA-handlarnas Förbund owns approximately 54 per cent of the total number of shares and votes in ICA Gruppen.

The Board of Directors’ recommendation

The Board of Directors’ opinion regarding the Offer is based on a joint assessment of a number of factors that the Board of Directors has considered relevant in relation to the evaluation of the Offer. The most important factors of the assessment have been presented above. These factors include, but are not limited to, ICA Gruppen’s present position, the expected future development and potential of ICA Gruppen and thereto related opportunities and risks. The Board of Directors has also evaluated the Offer in relation to equity research analysts’ and the equity market’s expectations on ICA Gruppen’s share price development and future profit, ICA Gruppen’s value in relation to comparable listed companies, previous comparable business transactions, bid premiums in previous public offers on Nasdaq Stockholm and ICA Gruppen’s long term value based on expected cash flows.

The Board of Directors has further considered the fairness opinion issued by Deloitte according to which the Offer is deemed fair for ICA Gruppen’s shareholders from a financial perspective, (subject to the assumptions and considerations set forth therein).

Based on the above, the Board of Directors[4] unanimously recommends the shareholders of ICA Gruppen to accept the Offer.

Impact on ICA Gruppen and its employees

Under the Takeover Rules, the Board of Directors is required to, based on BidCo’s statements in the announcement of the Offer, present its opinion regarding the impact that the implementation of the Offer will have on ICA Gruppen, particularly in terms of employment, and its opinion regarding BidCo’s strategic plans for ICA Gruppen and the effects that these may be expected to have on employment and on the locations where ICA Gruppen conducts its operations.

BidCo has in this respect stated that “ICA-handlarnas Förbund and AMF have great confidence in ICA Gruppen’s senior management and employees and consider them to be an important asset for ICA Gruppen also going forward. ICA-handlarnas Förbund’s and AMF’s intention is not that the completion of the Offer shall entail any material change for ICA Gruppen’s senior management or employees (including their terms of employment), the employment in ICA Gruppen or any material changes of the locations where ICA Gruppen operates. However, ICA-handlarnas Förbund and AMF will, following the completion of the Offer, continue to develop ICA Gruppen’s operations, while maintaining a very long-term ownership perspective, and may therefore implement changes and increased efficiency in the future in order to meet the challenges that ICA Gruppen faces.”

The Board of Directors assumes that this description is correct and has in relevant respects no reason to take a different view.

______________________________

This statement shall in all respects be governed by and construed in accordance with Swedish law. Disputes arising from this statement shall be settled exclusively by Swedish courts.

This statement has been made in a Swedish and English version. In case of any discrepancies between the Swedish and the English text, the Swedish text shall prevail.

Stockholm, 10 November 2021

ICA Gruppen AB (publ)

The Board of Directors

For more information
Cecilia Daun Wennborg, Chairman of the independent Board of Directors

Frans Benson, Head of Investor Relations

ICA Gruppen press service, telephone number: +46 (0)10 422 52 52

icagruppen.se

This information is such that ICA Gruppen AB (publ) is obliged to make public in accordance with the EU Market Abuse Regulation and the Takeover Rules. The information was submitted for publication, by the contact persons above, at 07:10 CET on 10 November 2021.

[1] As a result of BidCo being owned by ICA-handlarnas Förbund, the parent company of ICA Gruppen, and in accordance with the Takeover Rules, the Board members Claes-Göran Sylvén, Bo Sandström, Magnus Moberg and Anette Wiotti have not participated, and will not participate, in ICA Gruppen’s preparations of matters relating to, and evaluation of, the Offer.

[2] Through Murgröna Holding AB (publ).