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     overview

This profile deals with the Orkla conglomerate and Mecom.

It covers -

• introduction
• the group
• Mecom
• studies

     introduction

The Nordic Orkla conglomerate embraces heavy industry, publishing, brewing, banking, chemicals, frozen food, chocolates, pizza, jam, securities and investments, detergents and other products. As of 2004 it was the fifth largest media group in northern Europe and the second largest newspaper group in Poland.

In June 2006 it announced sale of its publishing operations to David Montgomery's Mecom group for €900m.

Its corporate site is here.

     the group

The group's subsidiaries operate in Norway, Denmark, Sweden, Poland, Eire,the Czech Republic, the Baltic States, Russia, the Ukraine and Poland. It has a 40% stake in Carlsberg Breweries (an amalgamation of its beverage arm with Carlsberg). Its Orkla Enskilda Securities is one of the largest investment groups in Scandinavia.

Around 67% of its 31,145 employees (as of 2000) and 60% of its revenues were outside Norway. An indication of major interests is here.

As of 2004 Orkla media embraced metropolitan and regional newspapers and magazines in Norway, Sweden, Denmark (the former Det Berlingske Officin group), the Baltic States, the Ukraine and Poland, along with direct marketing and 'new media' interests.

The group traces its history to iron mining in the 1650s but essentially dates from the middle of last century when several heavy industry and timber products companies in Sweden and Norway moved into consumer products and newspaper publishing.

A succession of 1990s mergers and acquisitions - notably purchase of the brewery and food interests from Volvo in tidying up the carmaker's messy diversification spree - resulted in a diverse assemblage of brands and subsidiaries that are slowly being consolidated.

An indication of the group's history is here.

     Mecom

In June 2006 Orkla announced that it had sold its media assets (which included some of Norway and Denmark's leading newspapers) to UK media executive David Montgomery's London-listed and junkbond-fuelled Mecom Group plc in a cash-&-shares deal reportedly worth €900 million.

The deal was expected to see Orkla become a significant minority shareholder in Mecom. Given that Mecom's share market value at the time of the announcement was £120m there was an expectation that substantial fundraising would be needed to complete the takeover, likely to involve a large rights issue.

Montgomery is a former chief executive of Mirror Group in the UK. During acquisition of newspapers and other assets in continental Europe he has been criticised for "short-term investment, unrealistic demand, heavy cost cuts and little respect for editorial values and quality" ... an echo of attacks on peers such as Singleton and Ingersoll.

In 2005 Mecom agreed to buy the Berlin publishing group Berliner Verlag (Berliner Zeitung and Berliner Kurier) from Holtzbrinck for £53m, acquiring the Hamburger Morgenpost (Hamburg's second largest daily newspaper) from Hans Barlach and Josef Depenbrock in 2006 and then agreeing to buy Netherlands group LMG from the Telegraaf Media Groep for €200 million.

Sale by Orkla was criticised by the group's journalists, who described Mecom as the "worst alternative" and appealed to management to find another buyer for the newspapers, which had been put up for auction.

     studies

There is no major English-language study of Orkla.

Perspectives are offered by works on the Wallenberg family's Enskilda group (which embraced Enskilda Securities and Volvo), a counterpart of the Klingspor & Stenbeck families' Kinnevik group. One example is The Art of Cloaking Ownership: The Secret collaboration and Protection of the German War Industry by the Neutrals - The Case of Sweden (Amsterdam: Amsterdam Uni Press 1996) by Gerard Aalders & Cees Wiebes, which has more bite than The Empire: The Rise of the House of Wallenberg (2001) by David Bartal. It can be supplemented with Peter Högfeldt's 2004 The History and Politics of Corporate Ownership in Sweden (PDF).

There is a more media-centric view in Robert Picard's paper in Global Media Economics: Commercialisation, Concentration & Integration of World Media Markets (Ames: Iowa State Uni Press 1998) edited by Alan Albarran & Sylvia Chan-Olmsted.





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