Aarhus goes to shareholders to clear Karlshamns merger

- Last updated on GMT

Related tags: Stock, Stock market, Share, Aarhus

Speciality fats and oils firm Aarhus United expected to merge with
fellow fats player Karlshamns will go to shareholders next week for
sale approval.

Ending months of speculation, Aarhus' main shareholder Malaysian firm United International Enterprises last month informed the market it would bring the two Scandinavian fats and oil companies together.

At the time UIE announced in co-operation with the main shareholder of Karlshamns, Melker Schorling (MS), they would submit a joint offer to the shareholders.

The transaction is based on the condition that Aarhus United entire shareholding in United Plantations Berhad, comprising shares directly owned by Aarhus United, as well as shares owned by the wholly-owned subsidiary, Aarhus Malaysia, in total equalling 23.4 per cent is sold to UIE.

According to Aarhus, the quoted price as at 8 June is MYR 5.05 (Bursa Malaysia Securities Berhad) and DKK8.40 (Copenhagen Stock Exchange) respectively, per share.

Aarhus United's shareholding in UPB is valued at DKK 416.8 million (€56million).

Combined, last year Karlshamns and Aarhus pulled in over €1 billion in sales, and €75 million in EBITDA.

"The combined entity is believed to be able to achieve substantial synergies both in terms of improved utilisation of the existing plants and equipment, but also in terms of opportunities for improved capital expenditures,"​ said UIE.

The future of Aarhus has been uncertain since UIE, citing a potential difference in long-term investment interests, announced in October 2004 it would divest its 45.6 per cent chunk of Aarhus.

As Scandinavia's number one fats and oils company, from the outset Karlshamns was mooted as the natural frontrunner for the Aarhus business: a combination of the two businesses creating a strong market player within speciality fats for the confectionery and food industries.

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