Historic agreement in Denmark

OK and Coop head quarters. Press photos
OK and Coop in Denmark, here represented by their respective headquarters, have entered into an agreement where OK buys parts of Coop. Photos: OK and Coop Denmark
By Reidar Molthe

19 April 2024 11:37

Historic agreement in Denmark

OK has entered into a historic agreement with Coop Danmark, whereby OK buys part of Coop Danmark. This partnership involves a capital injection of two billion DKK into Danish Coop.

The main goals of the agreement are to secure Coop Denmark's challenged economy and strengthen the company's investment capacity.
Coop Danmark's accounts for 2023 have not yet been completed, but it is already clear that the accounts will not be satisfactory (to say the least) and on a par with the accounts for 2022, according to NHH's experience.

The agreement gives OK decisive influence over Coop Danmark, although the ownership will be 50/50 between Coop and OK.
This partnership is seen as a natural extension of both companies' roots in the co-operative movement and their existing collaboration around OK's petrol and electric charging stations, according to a press release.

Faster decisionmaking

The agreement will (hopefully) help to strengthen Coop Danmark's grocery brands such as SuperBrugsen, Kvickly, Brugsen and 365discount. There is also an expectation that the partnership will contribute to Coop Denmark being able to return to its core business of running a healthy grocery business.

The negotiations, which took six months, resulted in an agreement which is intended to simplify the decision-making processes and accelerate the ability to adapt and develop the business.

"With OK, Coop Danmark has found the right partner. OK has a strong economy, we both have background in the co-operative movement, and we already collaborate around OK's fuel and electric charging stations. In addition, OK comes with strong competences in grocery retailing," says Coop Danmark's CEO Kræn Østergaard Nielsen, who has been at the forefront of the negotiations on Coop Danmark's side, and who will resign as manager when the agreement is formally completed.

"Ensures peace of mind"

"The agreement ensures peace of mind about Coop Danmark's finances - and thus also about the many OK stations, charging stations and car washes, which in many cases are owned and operated on a franchise basis by Coop Danmark or the independent user associations. And we believe that the capital injection and the partnership can contribute to Coop Danmark finding its core in running a healthy grocery business centered on the classic and strong Coop brands," says OK's CEO Michael Løve, who himself has a past as director of Netto, SuperBrugsen and Britain's largest hardware store chain B&Q.

Pernille Skipper, who is de facto elected as the new chair of Coop and therefore takes over as new chairperson of Coop national council on 20 April, says about the agreement:

"The association's basic task is to ensure good daily food for the Danes, and therefore it is only natural that the association must exist for the business. It is the first priority. At the same time, we also agree that there is no Coop Denmark, as we would like it to be, without the cooperative, and that a clearer association and more attention to the values that make Coop something special also helps the business".

Sources: Coop Denmark, OK Denmark, Jylland Posten, B.T.

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