The Norwegian conglomerate Orkla has agreed a €949m sale of its media division to David Montgomery’s Mecom Group.
Orkla, the Olso-Norway based conglomerate, announced this month that it had signed an agreement with Mecom Group, David Montgomery’s UK media investment company, for the sale of its newspaper, magazine, marketing and online publishing division Orkla Media.
The agreement was signed despite interest from Icelandic newspaper group Dagsbrun, which said that its bid for Orkla’s Media unit matched Mecom Group’s offer.
The €949m deal will leave Orkla with a strategic interest in Mecom, as the purchase consideration comprises NOK5.6bn (€713m) in cash, a 19.97% stake in Mecom valued at NOK852m (£73m) and a vendor loan note of £93.4m (NOK1.1bn) issued by Mecom to Orkla. Orkla will be entitled to appoint one director to the Mecom board.
Orkla Media has interests in Scandinavia, Poland, the Baltic States and Ukraine, and in 2005 had revenues of NOK8.7bn (US$1.38bn), and profits of NOK425m (US$67.5m). The company will continue to run its operations from Oslo and Bjørn Wiggen, managing director of Orkla Media, will become CEO of Mecom Europe.
The decision to agree a deal with Mecom was reached after examining a ‘Nordic solution’ for Orkla Media, which was found not to be viable. Orkla’s Group President and CEO Dag Opedal said that Orkla would “acquire an interesting financial position in an exciting new European media company with growth potential.”
Mecom was set up in 2000 by David Montgomery, after seven years as chief executive of the Mirror Group.