Kesko and Oriola-KD to establish a chain of health

KESKO CORPORATION STOCK EXCHANGE RELEASE 13.03.2017 AT 09.00 1(2)

Kesko and Oriola-KD to establish a chain of health, beauty and wellbeing stores across Finland

Kesko Corporation and Oriola-KD Corporation start building a completely new kind of store chain in Finland, specialising in overall wellbeing. The companies have signed an agreement to establish a joint venture. The establishment of the joint venture is subject to the approval of the competition authorities. The first phase objective is to build a chain of 100 stores and an online store. The plan is, if legislation is amended, to expand the business to include pharmaceuticals.

"In the joint venture, two strong and responsible Finnish operators combine their forces. Kesko has extensive experience in the grocery trade and a strong K consumer brand. Oriola-KD, for its part, is a highly valued distributor of health and wellbeing products and an expert in the pharmaceutical sector. Together, we start building a leading health, beauty and wellbeing chain in which Finnish people trust. Our plan is, as legislation permits, to expand the business into selling pharmaceuticals, without compromising on medical safety, and emphasising service and expertise. The new store chain is estimated to create as many as 1,000 new jobs across Finland," says Kesko's President and CEO Mikko Helander .

Both parties to the agreement will have a 50 per cent ownership interest in the new company to be established. In the first phase, Kesko and Oriola-KD will make a total capital expenditure of approximately €25 million in the joint venture. In the first phase, the aim is to build a chain of 100 stores. The first overall wellbeing stores will be opened in autumn 2017, and the target is to open a total of 15 stores by the end of the year. The stores will operate both offline and online.

The establishment of the joint venture is subject to the approval of the competition authorities. The handling of the matter is expected to be completed no later than the third quarter of 2017.

Oriola-KD has strong expertise and long experience in the trade of wellbeing and health products and pharmaceuticals in Finland and Sweden. The company owns Kronans Apotek, which is the third largest pharmacy chain in the Swedish market. 

A briefing in Finnish today at 13.00 Kesko and Oriola-KD will hold a briefing today, Monday, 13 March 2017 at 13.00 at Hotel Haven, Unioninkatu 17, Helsinki.

Further information: Jorma Rauhala, EVP, President, grocery trade, tel. +358 105 322 211, jorma.rauhala@kesko.fi Jukka Erlund, EVP, CFO, tel. +358 105 322 113, jukka.erlund@kesko.fi Karoliina Partanen, Vice President, communications, grocery trade, tel. +358 105 320 744, karoliina.partanen@kesko.fi

Kesko Corporation

DISTRIBUTION Nasdaq Helsinki Ltd Main news media www.kesko.fi

K Group Kesko and K-retailers form K Group, whose sales total over €13 billion. K Group is the third largest retail operator in Northern Europe and it employs approximately 45,000 people. Kesko operates in the grocery trade, the building and technical trade and the car trade. Its divisions and chains act in close cooperation with retailer entrepreneurs and other partners. Kesko's net sales are €10 billion and it employs approximately 30,000 people. Kesko has over 2,000 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Russia, Belarus and Poland. Kesko is a listed company and its shares are listed on Nasdaq Helsinki. The company's domicile and main business premises are in Helsinki. Kesko is the world's most responsible trading sector company (The Global 100 Most Sustainable Corporations in the World). www.kesko.fi

Oriola-KD Oriola-KD is a Finnish listed retail and wholesale company that distributes pharmaceuticals and health and wellbeing products. Oriola-KD has a strong position in the pharmaceuticals market in Sweden, Finland and the Baltics. We promote people's wellbeing by ensuring safe and efficient distribution of pharmaceuticals and healthcare consumer products and services to our customers. Oriola-KD's net sales are €1.6 billion, the company has 2,821 employees and 325 pharmacies in Sweden and Latvia. The company is headquartered in Espoo. www.oriola-kd.com