The UK’s Domino’s Pizza Group (DPG) has agreed to divest the entire shareholding in its loss-making Norwegian business to existing minority shareholders.
The move is aligned with the company’s previously announced plan to sell its directly operated international businesses.
DPG will sell 71% stake in DP Norway (DPN) to Pizza Holding and EYJA Fjarfestingafelag III EHF for a cash outlay of up to £7m.
In turn, DPG will acquire the buyers’ entire stake in Swedish operations (Domino’s Sweden or DPS) by paying a nominal amount of Nkr1 in cash.
Following the transaction, DPG will own 100% stake in Domino’s Sweden, a step that will help the company sell the Swedish business in due course.
As agreed, DPG will continue to fund Norwegian operations until the completion of the transaction.
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DPN has been running in losses for a number of years. For the year ending 31 December 2018, DPN reported an underlying operating loss before tax of £6.6m.
Domino’s Pizza Group CEO David Wild said: “We are today announcing the disposal of our Norwegian business to its minority shareholders, subject to shareholder approval.
“This transaction is positive for all stakeholders and also provides DPG with a clean exit from Norway following operating losses and high levels of capital expenditure over a number of years.
“The new owners have exciting plans for the business and importantly, the Domino’s brand will retain its presence in Norway.”
The transaction is expected to complete by May 2020, subject to shareholder approval.
If the deal fails to secure shareholder approval, DPG will pay the minority shareholders £1m break fee.