Skel fjárfestingafélag

M&A Activity • May 22, 2025

SKEL fjárfestingafélag hf.: Orkan signs purchase agreement for shares in Samkaup

SKEL fjárfestingafélag hf.: Orkan signs purchase agreement for shares in Samkaup

Following previous discussions between SKEL fjárfestingafélag hf. (“SKEL”) and Samkaup hf. (“Samkaup”) regarding a merger of Samkaup with Orkan IS ehf. (“Orkan”) and Atlaga ehf. (formerly Heimkaup), further discussions took place with Kaupfélag Suðurnesja svf. (“KSK”), the largest shareholder in Samkaup, about resuming the dialogue under new terms. This past December, the parties reached an agreement on a merger between Atlaga and Samkaup, a transaction that received competition authority approval in April.

Today, a purchase agreement was signed between Orkan as the buyer and KSK as the seller for all of the seller’s shares in Samkaup, with a nominal value of ISK 221,386,719, representing 51.3% of Samkaup’s share capital.

The purchase price of the shares is a total of ISK 2,878 million and is based on a valuation of Samkaup’s total equity value at ISK 5,610 million, which corresponds to ISK 13 per issued share. The transaction price implies a total enterprise value of ISK 9,606 million for Samkaup, based on its debt position at the end of the first quarter.

The purchase price will be paid by delivering new share capital in Orkan. The value of Orkan’s shares at the time of the settlement will be ISK 10,669 million, based on the book value of the company in SKEL’s financial statements as of last year-end. Orkan also owns around 81% of Lyfjaval, which is recorded at ISK 1,928 million, as well as a share in Samkaup, resulting from the merger of Atlaga ehf. and Samkaup, which is valued at approximately ISK 545 million in this transaction.

The agreement provides for the formation of a group structure similar to that of listed retail companies in Iceland. The group will initially operate in the fields of groceries, energy, car wash services, and pharmaceuticals, and these segments will be managed on a consolidated basis.

The transaction is subject to the following conditions:

1. Completion of the merger between Samkaup and Atlaga ehf. according to the merger agreement dated 20 February 2025;
2. That binding subscription commitments from investors, or an underwriting by an Icelandic bank, are in place for a subscription to new share capital in Orkan (or the new parent company of the group) amounting to at least ISK 2,000 million, which is to be used to strengthen Samkaup's financial position;
3. That Orkan has reached a binding agreement with other shareholders in Samkaup to purchase their shares such that the total holding of Orkan and other SKEL-related parties will amount to at least 90.01% after the transaction;
4. Approval by the KSK supervisory council;
5. Approval from the Competition Authority that the transaction does not constitute a merger that should be annulled or subjected to conditions pursuant to Article 17 of the Competition Act No. 44/2005.

If the transaction materializes, the parties agree to work jointly towards revitalizing Samkaup and enabling it to grow in the consumer market, both through internal and external growth, and aim for a public listing of all shares in the group’s parent company on the regulated market in Iceland before the end of 2027.

Following the settlement of the transaction and the planned capital increase, SKEL’s share in the group’s parent company will be approximately 63%, with the estimated value of SKEL’s stake amounting to ISK 13,500 million. Other shareholders of Lyfjaval will be offered the opportunity to participate in the transaction on the same terms as the above-mentioned deal, as will all other shareholders of Samkaup once the conditions are met.

Ásgeir Helgi Reykfjörð Gylfason, CEO of SKEL:

“We are pleased to be one step closer to creating a new force in the Icelandic retail market. This aligns with the objectives we presented in our last financial report regarding the development of Orkan’s group structure. Samkaup is a company with a long history and loyal customers across the country. SKEL will focus on streamlining operations, reducing costs, and putting the customer first. These priorities have proven successful in Orkan’s operations. Samkaup and Heimkaup (now Atlaga ehf.) have faced challenges in their operations, but through the merger and operational restructuring, a strong market competitor will be formed.”

Legal advisor to SKEL is BBA//Fjeldco and financial advisor is the corporate finance division of Fossa fjárfestingarbanki hf.

Further information is available from Ásgeir Helgi Reykfjörð Gylfason, CEO, at fjarfestar@skel.is