Pitch Best Deal 2021: PLUS – Coop

De beste deal van het jaar is meer dan het hoogste cijfertje in de krant en de kunst van het dealmaken is meer dan het opstellen van een contract. De Awards voor de beste deal zou dus niet alleen op de prijs van de deal gebaseerd moeten zijn, maar vooral op de – toegevoegde – waarde voor een bedrijf en de exit.

Name of the deal:  Merger between PLUS and Coop 
Date announced: 06-09-2021 
Date closed: The transaction is expected to be completed early 2022.  
Published value: >500 million (€)    
Buyer(s): Plus    
Target: Coop  
Seller: Coop Holding   

  Involved  firms  and  advisors  buy  side:   
AXECO (M&A Advisory), NautaDutilh (Legal Advisory Corporate/M&A), PwC (Tax Advisory), KPMG (Financial Due Diligence) 
Involved  firms  and  advisor’s  target:  
n/a 
Involved  firms  and  advisors  sell  side:   
EY (M&A Advisory, Financial Due Diligence and Tax Advisory), HVG Law (Legal Advisory Corporate/M&A), EY Patheron (Consultancy) 

Pitch     

Brief  description  deal / Deal  outline   
PLUS and COOP will merge and continue together as one cooperative. PLUS and COOP reached an agreement on intended merger. This creates the 3rd largest service supermarket in the Netherlands under one strong brand 'PLUS' with approximately 550 shops and a market share of over 10%. The new combination has a strong starting position as the best rated and most customer-oriented supermarket. PLUS and COOP form a new cooperative PLUS U.A. in which passionate independent entrepreneurship and active consumer involvement are guaranteed.  

Why should this deal win the Award for Best Deal 2021?   
It is from various perspectives a historical transaction. It doesn’t happen too often that two iconic Dutch cooperatives of this scale merge. PLUS and COOP are the only two sizeable cooperatives active in the service supermarket sector. By means of this merger the third biggest service supermarket on the Dutch market will be created, with 550 shops and a total consumer turnover of approximately EUR 5 billion. The combined organization will employ over 40,000 employees and serve over 4.5 million customers each week. This merger will create a strong, future proof and competing player in the Dutch supermarket branch, with a familiar formula and the highest customer rating.  

The nature of the transaction is highly uncommon. There are few cooperatives of similar size to PLUS and Coop. Given that a (Legal Advisory Corporate/M&A) merger between two cooperatives is very rare, this merger between two large cooperatives is unique. It is highly complex bringing together two cooperatives with their own culture, identity and governance structure.  Finally, the transaction has a profound impact on all stakeholders, where both entrepreneurs and consumers are able to enter as members into the newly formed cooperative, which will continue under the strong branding of PLUS. On the one hand, members will be able to benefit of the nationwide coverage of stores and distribution network, multiformat formula and strong financial position of the combination. Additionally, the combination will be able to benefit from annual synergies of c. €50m related to cost savings and increases in revenues as a result of a powerful formula. On the other hand, consumers will be able to benefit from the combination’s omni-channel sales approach, competitively priced goods and core focus on Corporate Social Responsibility (CSR). 

Deal rationale:   
The merger of PLUS and COOP will create a strong, future-proof and competitive player in the Dutch supermarket landscape. The powerful combination offers excellent long-term prospects in the competitive food retail market, both for the cooperatives and their members. PLUS and COOP have very similar core values and are therefore an excellent fit for each other. They both have a strong focus on customer satisfaction, sustainability and social impact. Thanks to the increased scale, customers throughout the Netherlands can be served even better. With more focus onconvenience, inspiration and quality, and with the help of modern technology and data, the combination will respond even better to the changing needs of customers, today and in the future. With a stronger financial position, further investments can be made in the shop network and the fast-growing online proposition. In time, the merger is expected to yield annual combined benefits of EUR 50 million.  

  What is the impact of this deal on the company?   
The new formed cooperative will secure a long-term future for the company in the extremely competitive and consolidating market. By joining forces, a new cooperative is created with a strong and trusted formula with the highest customer appreciation: PLUS was recently voted the best supermarket in the Netherlands. The combination of two cooperatives allows both cooperatives to retain their unique cooperative structure. By choosing and focusing on one brand, the service to customers can be further improved. PLUS is a leader in sustainability and has been voted the most responsible supermarket in the Netherlands for 7 consecutive years. The merger with the branch organisation and the related best practices of COOP makes the combination even stronger. With annual synergies of EUR 50m, the company is able to better respond to further invest in the shop network and the fast-growing online proposition, offering excellent long-term prospects in the competitive food retail market. 

What is the impact of this deal on the direct stakeholders?   
Together, PLUS and COOP can successfully achieve their ambitions, both for and with their members: independent franchisers and consumers. The new formed cooperative, PLUS U.A., will secure a long-term future for entrepreneurial franchisers and the active involvement of consumers. By joining forces, PLUS and Coop can ensure that its franchisers can continue to serve their local markets successfully in the future, with even more focus on convenience, inspiration and quality, driven by economies of scale and the strong PLUS brand. The combination will have 40,000 employees and one integrated service office in Utrecht with a management consisting of CEO Duncan Hoy (currently CEO PLUS), CFO Fred Bosch (currently CEO Coop) and COO Mayte Oosterveld (currently CFO PLUS). The Supervisory Board will have a balanced composition with representative from both organisations. 

What  is  the  impact of  this  deal on society?  
New combination has a strong starting position as the best-rated and most customer-focused supermarket. PLUS is a leader in sustainability and has been voted the most responsible supermarket in the Netherlands for 7 consecutive years. The merger with the branch organisation and the related best practices of COOP makes the combination even stronger. The combined organization employs over 40,000 people and serves more than 4.5 million customers every week. With greater focus on convenience, inspiration and quality, and by using modern technology and data, the combination will improve its ability to anticipate the changing needs of the customer, both now and in the future. With annual synergies of EUR 50m, the company is able to better respond on the changing needs of its customers and society. 

What  was most complex  about  this  deal?   
The structure of the deal, whereby two cooperatives with a different legal cooperative structure and financial and profit distributing model are combined into one cooperative. In this new cooperative, passionate independent entrepreneurship and active consumer involvement had to be safeguarded. The deal affects many areas of the law and required much effort on the competition law aspect, as well as on setting up the new cooperative structure. On top of that, the valuation of two cooperatives (including >900k consumer members), whereby profits are redistributed to members, required much creativity.