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(Hong Kong - 4th February 2003) Hutchison Whampoa and Nestlé Waters jointly announce that they have just signed an agreement for the acquisition by Nestlé Waters of the Powwow Group, from A.S. Watson (ASW), a subsidiary of Hutchison Whampoa Limited (HWL).
The Powwow Group started its European HOD business in September 1998. In the last three years Powwow has developed its activities across Western Europe, through a series of very dynamic acquisitions and strong organic growth. Powwow brings together 1500 employees, in seven countries: France, Germany, the Netherlands, the UK, Denmark, Italy and Portugal. In 2002, the Powwow company's turnover accounted for approximately 120 million euros.
HWL Group Managing Director Canning Fok commented, "We are proud to have seen Powwow develop into a successful brand and become one of the leading players in Europe in just over four years through Hutchison's decisive investment approach and Powwow's management expertise. Our success made it attractive to Nestlé who is already the world's largest food company and leader in bottled water. This deal represents the realization of significant value to shareholders of HWL, whilst on the other hand, Powwow can also further grow their business in the good hands of Nestlé Waters."
To ASW, this transaction is a result of a major business review of the division's European businesses following its acquisition of the Kruidvat group, one of the largest health and beauty chains in Europe. "Whilst ASW has decided to sell the Powwow business to focus on the expansion of its health and beauty retail businesses in Europe, it will continue its Asian water and beverage businesses," said Ian Wade, ASW Group Managing Director.
Robert Finnegan, CEO of Powwow said, "This is a unique opportunity to build on the strong platform that we have created with Powwow to grow this dynamic sector of the market. Powwow's distinctive service, culture and innovative approach together with Nestlé Waters' expertise make this a suitable combination."
The acquisition is in line with Nestlé Waters' strategic development plans as presented by CEO Frits van Dijk : "Europe and the Home and Office Delivery channel (HOD) are two of the strategic pillars of Nestlé Waters' development". The addition of the Powwow network to our existing operations in Europe is a key element to forming a truly pan-European presence in HOD. In such a high potential new business, with double digit long term growth, we ensured a good start by acquiring the right positions. In two years we have built a significant presence throughout Europe and Nestlé Waters ranks number one in the region ".
Created in the U.S. at the end of the nineteenth century by the Arrowhead brand, today owned by Nestlé Waters, Home & Office Delivery represents approximately 40% of the total U.S. bottled water business. Led in the U.S. by Nestlé Waters North America, a subsidiary of Nestlé Waters, Home & Office Delivery is based on the idea of service, allowing the company to build a steadily growing base of satisfied consumers. Thanks to its North American expertise Nestlé Waters decided to enter this very dynamic young business in Europe in the year 2000.
The HOD sector in Europe represents only 3% of the water business but the growth prospects in the following years are very attractive (about 15% to 20% per year). At current rates of growth it will more than double over the next five years.
The Powwow acquisition will enable Nestlé Waters to significantly increase its presence in Europe and will provide the company with a strong platform for further development of its HOD activities. This acquisition equally offers great synergy opportunities in the countries where Nestlé Waters is already present. In total, Nestlé Waters HOD in Europe will now be present in 10 European countries including the United Kingdom, Germany, the Netherlands, Portugal, Denmark, Poland, Greece, Russia, Italy and France.
The closing of the transaction is subject to the usual closing conditions, including relevant regulatory approvals.
Nestlé Waters is the Nestlé Group's Bottled Water Division. With sales over 5 billion euros (7.5 billion CHF) in 2001, Nestlé Waters leads the bottled water business world-wide.
For more information, please visit www.nestle-waters.com
Hutchison Whampoa Limited (HWL), one of the largest companies listed on the Hong Kong Stock Exchange, is the holding company of the Hutchison Whampoa Group of companies. As one of the earliest big "hongs" or trading companies in Hong Kong, Hutchison's history dates back to the 1800s. Today, HWL is a multinational conglomerate with businesses spanning 41 countries. With over 150,000 employees worldwide, Hutchison operates and invests in five core businesses: ports and related services; telecommunications; property and hotels; retail and manufacturing; and energy and infrastructure.
Its flagship companies include Hutchison Port Holdings, Hutchison Telecom, Hutchison Whampoa Properties, A. S. Watson, and Cheung Kong Infrastructure. In 2001, HWL's consolidated revenue was US$ 11.415 billion (HK$ 89.038 billion).
For more information, please visit www.hutchison-whampoa.com
For further information, please contact:
Hutchison Whampoa Limited
Laura Cheung
Tel: +852 2128 1289 / Fax: +852 2128 1766
Cell: 852 7318 4778
Email: laurac@hwl.com.hk
Nestlé Waters
Hubert Genieys
Tel: +33 (0) 1.41.23.39.45 / Fax: +33 (0) 1.41.23.37.67
Cell: 06.07.97.62.41
Email: hubert.genieys@pvfr.nestle.com
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