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ZKiP „Lewiatan 94” Holding S.A. Joins Emperia

20-08-2008

Emperia Holding S.A., one of the largest Polish FMCG retail and wholesale trading groups, has acquired a controlling interest in Związek Kupców i Producentów „Lewiatan 94” Holding S.A. in Włocławek.

The parties to the transaction include Emperia Holding S.A. and certain individuals and legal persons holding shares in ZKiP „Lewiatan 94” Holding S.A.

The acquisition of the interest in ZKiP „Lewiatan 94” Holding S.A. will be financed with internal cash flows of Emperia Holding S.A. This takeover marks yet another step in pursuit of the Group’s development strategy that assumes active consolidation of the retail and wholesale market in Poland, including Polska Sieć Lewiatan.

“With a view to strengthening the market standing and ensuring fast growth of Lewiatan, we decided to merge with Emperia. It is our opinion that only stable close cooperation with that company will provide our franchisees with the highest level of wholesale services,” said Wojciech Kruszewski, Chairman of Management Board, ZKiP „Lewiatan 94” Holding S.A.

„Lewiatan 94” Holding S.A. is the sole proprietor of the LEWIATAN brand and the franchisor for a chain of FMCG retail outlets operating under the same name. At the moment, the chain comprises 2,174 outlets covering some 85 percent of the Polish national territory. The aggregate area of the outlets totals some 145,000 sq. m and the annual gross turnover stands at approximately PLN 4.6 billion. In 2007, ZKiP Lewiatan 94 Holding S.A. reported PLN 83.4 million in income.

The Emperia Trading Group is one of the largest Polish FMCG wholesale and retail trading groups. The wholesale subsidiaries of the Emperia Trading Group operate 70 distribution warehouses located all over Poland. The proprietary retail chains comprise over 260 supermarkets. The franchise chains of the Emperia Group include over 3,200 FMCG outlets with the aggregate area of over 270,000 sq. m. In the third quarter of 2007, a public offering on the Stock Exchange in Warsaw raised Emperia Holding S.A. PLN 232.5 million for its further growth.

In 2007, the Emperia Trading Group reported PLN 4.6 billion in revenues. The net profit of the company was PLN 89.7 million. In 2007, the group’s investment outlays totalled PLN 119.9 million and the investment outlays budgeted for 2008 stood at PLN 175 million, 46 percent up on the previous year. Talks are well under way with further partners interested in joining the Emperia Trading Group.

Company Background Information:

Emperia Holding S.A. has been consistently pursuing the consolidation of the retail and wholesale FMCG market in Poland. Following the 2006 takeover of the BOS Group (56 branches and 81 outlets in Eastern and North-Western Poland), in July 2007 it incorporated Społem Tychy (36 retail outlets in the Śląskie Region), and in September the Centrum subsidiaries (13 retail outlets in the Warmińsko-Mazuskie Region of Poland) and Maro-Markety (18 retail outlets located in the Wielkopolskie and Opolskie Regions of Poland).

In June 2007, the decision was made to acquire 100 percent of the wholesale subsidiaries of Sydo in Wrocław and Alpaga Xema in Poznań. October saw the incorporation of Euro Sklep S.A. (265 retail franchises and proprietary outlets operating in the Śląskie, Opolskie, Dolnośląskie, and Małopolskie Regions of Poland), and in November Emperia acquired Sklepy Polka (74 outlets in the Podlaskie and Świętokrzyskie Regions). In December, Retail Services Poland (27 retail franchises) was taken over.

The acquisitions continued in 2008. In February the Holding incorporated Lewiatan Dolny Śląsk and Lewiatan Zachód, and Lewiatan Orbita in April. Emperia also concluded the Strategic Cooperation Agreement with Lewiatan Holding, opening the door to a full equity integration with Lewiatan. The company has set its sights on further acquisitions, and talks are well under way with partners seeking to join the Emperia Trading Group.

The Emperia Trading Group has been in the Polish market for 18 years now. Its operations fall into two major business segments: retail (among others Stokrotka and Stokrotka Premium, Groszek, Milea, Lewiatan Podlasie, Zachód, Dolny Śląsk, and Orbita, Społem Tychy, Jaskółka, Centrum, Euro Sklepy) and wholesale (9 subsidiaries: Tradis, BOS, DLS, Sygel-Jool, DEF, Express Podlaski, Sydo, Alpaga-Xema, and an importing and exporting arm, Arsenal). In April, the process of integrating selected wholesale companies into a single business under the business name of Tradis kicked off. Both business segments of Emperia Trading Group boast a workforce of close to 11,000.