May 30, 2007

Finland's Lannen Tehtaat sells Suomen Rehu, retains Avena Nordic Grain

Finnish competition authorities have approved the sale of 51 percent of shares of Suomen Rehu by Lannen Tehtaat, but denied the sale of Avena Nordic Grain to SOK subsidiary Hankkija-Maatalous.

On January 19, 2007 Lannen Tehtaat plc and SOK subsidiary Hankkija-Maatalous Oy signed a share-transaction agreement whereby 51 percent of the shares in Suomen Rehu Ltd and Avena Nordic Grain Oy would be transferred to the ownership of cooperative Hankkija-Maatalous Oy.

Competition authorities in March decided that the further investigation of the merger notification lodged by Hankkija-Maatalous was necessary.

The merger of the grain trading operations of Avena Nordic Grain with the grain trading division of Hankkija-Maatalous is thought to create a dominant market position for Hankkija-Maatalous in Finland which prompted parties to keep Avena.

The competition authorities are continuing their investigation.

As the shift of the majority shareholding of Suomen Rehu Ltd (320 employees) goes ahead, enterprise value of the company has been agreed at 71 million euros.

The price for the 51 percent of the shareholding in the company to be sold is about 24 million euros. The purchaser will also assume responsibility for the net debts of Suomen Rehu at the moment when the closing takes place.

The sale of the majority shareholding in Suomen Rehu is expected to generate a profit of about 6 million euros.

Hankkija-Maatalous has a purchasing option to buy the remaining 49 percent shares of Suomen Rehu, which can be effectuated at least 15 months after closing of the current deal.

(US$1 = 0.74 euro)