Coop Denmark and OK Forge Strategic Partnership, Inject Billions to Strengthen Retail Presence

The owner of Coop Denmark, Coop amba, has entered into an agreement with the energy company OK, which is now buying half of Coop Denmark and together they are injecting two billion kroner into Coop Denmark.

As part of the agreement, OK gains decisive influence over Coop Denmark.

“With OK, Coop Denmark has found the perfect partner. OK has a strong economy, we both have roots in the cooperative movement, and we already collaborate on OK’s fuel and electric charging stations. Additionally, OK brings strong expertise in grocery retail,” says Coop Denmark’s CEO Kræn Østergaard Nielsen, who has led the negotiations from Coop Denmark’s side.

As part of the agreement, the parties inject two billion kroner into Coop Denmark. The money from Coop amba, the association behind Coop Denmark, comes in part from the sale of some of the association’s assets, including Coop Bank.

Previous plans to discontinue the chains Kvickly, Brugsen, and SuperBrugsen in favor of creating a new chain, Coop, are abandoned, and instead, the three brands along with 365discount will be strengthened.

“Our experiences show that customers prefer SuperBrugsen and Kvickly. We are taking that into account and now focusing fully on our well-known brands. This also means that the remaining Irma stores will become SuperBrugsen instead of Coop chain stores,” explains CEO Kræn Østergaard Nielsen, who steps down in connection with the agreement.

Ensuring financial stability

Coop Denmark’s financial statement for 2023 is not yet finalized, but it is already clear that the statement will not be satisfactory and at the level of the 2022 statement. The statement is expected to be published by the end of April.

Despite an expected deficit of a three-digit million amount, it is expected that the agreement can ensure financial stability.

“The agreement ensures stability for Coop Denmark’s finances – and thus also for the many OK stations, charging stations, and car washes, which in many cases are owned and operated on a franchise basis by Coop Denmark or the independent Brugsforeninger. And we believe that the capital injection and partnership can contribute to Coop Denmark returning to the core of operating a healthy grocery business centered around the classic and strong Coop brands,” says OK’s CEO Michael Løve, who himself has a background as CEO of Netto, SuperBrugsen, and Britain’s largest DIY store chain B&Q.

The agreement includes, among other things, the introduction of simpler decision-making processes in Coop Denmark, accelerating the ability to adapt and develop the business. Therefore, the agreement extends Coop Denmark’s new governance structure, where the management authority over the business will unequivocally lie with the board of Coop Denmark A/S.

Future chairman: Focus on Coop’s values

Pernille Skipper, who is de facto elected as the new chairman of Coop amba and therefore assumes the position as chairman at Coop amba’s national council on April 20, comments on the agreement:

“The association’s fundamental task is to ensure good groceries for the Danes, and therefore it is only natural that the association must exist for the business. That is the top priority. At the same time, fortunately, we also agree that there is no Coop Denmark as we want it without the cooperative association, and that a clearer association and more attention to the values that make Coop something special also benefit the business.

In connection with the agreement, the parties have drafted a memorandum of understanding entitled “United about Business,” which formulates the framework and a common understanding of the future collaboration between the association and the business.

“With its two million members, Coop amba must help ensure and reinforce that Coop Denmark becomes profitable and activates the potentially most loyal and engaged customer base in the kingdom. This requires changes in both the business and the association, which I will work to strengthen as a modern, active, outward-facing, and visible actor,” says Pernille Skipper.

The agreement is to be finally decided upon at Coop amba’s national council meeting on Friday, April 19.