Tengelmann opts for EDEKAPrint

Plus and Netto Marken-Discount to form joint venture – Sales in excess of EUR 11 billion – New joint purchasing deal for Kaiser's Tengelmann AG

Mülheim an der Ruhr / Hamburg, November 16, 2007 – The Tengelmann Group based in Mülheim an der Ruhr will in future be cooperating closely with the Hamburg-headquartered EDEKA Group. An agreement in principle was signed today in Mülheim an der Ruhr by Karl-Erivan W. Haub, Managing Partner at the Tengelmann Group, and EDEKA AG Management Board Chairman Alfons Frenk. The agreement covers the key points in a long-term partnership between Tengelmann’s discounter Plus and EDEKA subsidiary Netto Marken-Discount in Germany. In addition, in a deal subject to approval by the antitrust authorities, Kaiser’s Tengelmann AG is to cooperate with EDEKA AG on purchasing. Die Kooperation unterliegt dem Vorbehalt kartellrechtlicher Genehmigung.

Forging ahead in the German discount segment

Merging Plus and Netto Marken-Discount will create a new joint undertaking that ranks among the leaders in the German food discounting segment. “For me a partnership with EDEKA makes good sense because the Plus and Netto concepts not only complement one another, their branch networks are also an ideal fit geographically,” said Karl-Erivan W. Haub at today’s press conference in Mülheim an der Ruhr.

“With Netto Marken-Discount we have a high-yielding discount concept. We share with Tengelmann the common objective of developing a growth-oriented discounter with overall sales in excess of EUR 11 billion and expanding our involvement in the discount segment of the German market for the long term,” emphasized Alfons Frenk. “Cooperating with the Tengelmann Group reinforces our position as the Number 1 in Germany. That’s bound to benefit our over 4,000 independent EDEKA entrepreneurs.”

The new company in which EDEKA has a 70 percent stake and Tengelmann 30 percent will amalgamate the around 2,900 Plus stores with sales of over EUR 7 billion along with some 1,300 Netto Marken-Discount branches with turnover of EUR 4.1 billion. “Our expansion plans for the joint undertaking foresee more than 300 new store openings per year,” Mr. Frenk announced.

“We are delighted to be working together with the Number 1 in German food retailing,” commented Mr. Haub. “Both sides want to see a genuine partnership with each contributing its own strengths. That’s why we are retaining a majority stake in the Plus Online Shop, because we have greater experience in this field.”

Purchasing boost for Kaiser’s Tengelmann AG

Cooperation with EDEKA also extends to the Kaiser’s and Tengel­mann supermarkets. “In the course of discussing this partnership, EDEKA has offered its support in procurement for Kaiser’s Tengelmann. We were pleased to accept the offer because we see the prospect of long-term synergies in purchasing,” Mr. Haub continued. Kaiser’s Tengelmann AG operates 703 Kaiser’s and Tengelmann supermarkets, generating overall sales of EUR 2.5 billion. The coming months will see further harmonization of contractual agreements.

Tengelmann in profile
The Tengelmann Group is an international trading group whose subsidiaries include Plus, OBI, KiK, Kaiser’s Tengelmann and A & P. The family business was first founded in 1867 in Mülheim an der Ruhr and is now managed by the 5th successive generation. With 8,056 branches and 151,753 employees in 15 countries, in its 2006/2007 financial year the Group achieved sales totaling EUR 24.52 billion.

EDEKA in profile
With sales in excess of EUR 37 billion, the EDEKA Group is the market leader in food retailing in Germany. It‘s core business is centered on its merchant-managed supermarkets. The cooperative-based EDEKA Group is underpinned by over 4,000 independent entrepreneurs. Since its takeover of Netto Marken-Discount, the EDEKA Group has continued to dynamically develop its discount business. With its current 1,300 stores, Netto Marken-Discount will this year post sales amounting to EUR 4.1 billion.