Euroapotheca closed the transaction with Oriola Corporation in Sweden
Euroapotheca Holding SWE, controlled by Euroapotheca UAB (“Euroapotheca”), and Oriola Corporation (“Oriola”) have today closed the transaction, which was announced on 9th February 2022, combining their respective retail pharmacy businesses in Sweden Euroapotheca’s Apoteksgruppen and Oriola’s Kronans Apotek.
The transaction has been implemented in full scope as announced in February, having received unconditional merger clearance from Swedish competition authority.
The respective pharmacy businesses have been combined into a 50 percent and 50 percent equally owned joint venture holding company in Sweden. As part of further process, the operational retail companies are expected to be integrated in the future and to operate under one common brand.
The Board of the newly formed joint venture company will consist of five members, with three members nominated by Euroapotheca – Mr. Paulius Mencas, Chairman of the Board and CEO of Euroapotheca, Mr. Tomas Kibildis, Chairman of the Board of Eurovaistinė UAB, and Mr. Jurgis Gabrielius Rudgalvis, Board Member of Euroapotheca, and two nominated by Oriola – Mr. Panu Routila, Oriola’s Chairman of the Board, and Ms. Katarina Gabrielson, the CEO of Oriola Corporation. Mr. Panu Routila is elected as the Chairman of the Board in the joint venture. Mr. Erik Sjögren, who has been leading Apoteksgruppen as its CEO, is taking over the lead in the combined business as the CEO of joint venture companies.
The combined business has over 470 pharmacies and around 40 franchise pharmacies, full online pharmacy operations, over 2,300 full-time employees and an illustrative combined revenue of EUR 1,140 million as of 2020 in Sweden. The combined business is the third largest player in the Swedish retail pharmacy market by revenue, with an estimated combined market share of ca. 25 percent, and the largest chain by the number of pharmacies.
Additionally, as part of the transaction, Oriola transferred its sourcing function of OTC drugs and traded goods, consisting of relevant contracts and sourcing experts, from its wholesale company Oriola Sweden to the combined business.
As announced previously, the transaction is motivated by the opportunity to create significant synergies and increase the scale and market presence of the combined business. The transaction is estimated to create annual run-rate synergies of approximately EUR 25 million on EBITDA level. The synergies are expected to realise in full by 2026.
“We are happy to announce closing of the transaction with Oriola, which we concluded back in February. Sweden has been one of our strategic markets ever since we entered it in 2018 and today marks important milestone in this journey. This is also our first joint venture partnership and therefore an important development for the whole Euroapotheca group – I view this as an excellent opportunity for us to grow as a business organization and as a strength in this venture, with Oriola being an experienced and reputable partner in this market” comments Paulius Mencas, Chairman of the Board at Euroapotheca.
Changes in Euroapotheca’s board
With the closing of the joint venture transaction, there are changes in Euroapotheca’s board: Mr. Erik Sjögren is replaced by Mr. Jurgis Gabrielius Rudgalvis, who will serve as the Integration Director in the joint venture in Sweden. Further, Mr. Vykintas Juška, the CEO of Euroapotheca’s subsidiary Siromed Pharma UAB, responsible for the group’s private label and represented brand businesses, joins the board. Euroapotheca’s board will now consist of six members: Mr. Paulius Mencas (Chairman), Mr. Tomas Kibildis, Ms. Natalja Zaharova, Mr. Dominykas Kryževičius, Mr. Jurgis Gabrielius Rudgalvis and Mr. Vykintas Juška.
In the joint venture transaction Euroapotheca has been advised by TGS Baltic, as the leading legal advisor, and Advokatfirman Cederquist KB, which advised on Swedish law matters.