During autumn 1996, Orrefors Kosta Boda underwent an ownership shift that attracted considerable media coverage. Since taking over ownership of Kosta Boda during the 1980s, Proventus has had a considerable interest in the glassware industry and in 1996 Proventus wanted to assume increased responsibility for Kosta Boda by ultimately acquiring the entire company.

As a result of discussions with the other main owners, Proventus, Scandinavian Equity Partners and Royal Copenhagen made a joint offer for the entire company. Orrefors Kosta Boda, considered one of the world’s foremost companies for the design, manufacture and sales of high-quality glassware and art glass, sold its products under two brand names, Orrefors and Kosta Boda. Design and Product development activities were conducted separately by the two organizations, while marketing, distribution and other functions were largely undertaken jointly for both brands.

The group included Orrefors Kosta Boda’s five glassworks, Sea, a subsidiary glassworks, the raw material producer Glasma and sales companies in the U.S., Australia and Japan. The approximate number of employees in the group during 1996 was 1,079. Since autumn 1996, Orrefors Kosta Boda was a wholly owned subsidiary of Orrefors Kosta Boda Holding, in which Proventus held a 42.5% interest, Scandinavian Equity Partners 42.5% and Royal Copenhagen 15%.

Orrefors Kosta Boda marketed its products through its own sales companies and through distributors. Sales in the consumer market were mainly channeled through department stores and retail chains specializing in glassware. Cooperation with Royal Copenhagen was initiated during 1996, which enhanced the impact of the companies’ efforts to penetrate major markets outside the Nordic region. Orrefors Kosta Boda reported total sales of MSEK 664 in 1996. Orrefors Products accounted for 45% of total sales revenues and Kosta Boda for 46%. The principal markets were Sweden, representing about 53% of sales, followed by the U.S. (approx. 21%) and Australia (approx. 6%).

In October 1996, Proventus launched a tender offer to acquire up to 50% of Orrefors Kosta Boda. After negotiations with the other large shareholders, a consortium consisting of Proventus, the Danish glass and porcelain company Royal Copenhagen and the private equity fund Scandinavian Equity Partners, acquired 100% of Orrefors Kosta Boda. Parties within the consortium had the ambition to create a strategic plan and a lasting ownership structure. However, it soon became clear that the partners had very different objectives regarding their ownership in Orrefors Kosta Boda.

While the owners were working toward an agreement on a new strategy, the company’s profitability suffered from lack of direction. Proventus offered to take full responsibility for the future development of the group, either as sole or majority owner of Orrefors Kosta Boda, or as owner of Kosta Boda after a de-merger. Although numerous alternatives were explored during the negotiations, it proved impossible to reach an agreement that provided Proventus with a satisfactory level of influence over the development of the group. The deadlock was resolved in September 1997 when Proventus agreed to sell its shares in Orrefors Kosta Boda to Royal Copenhagen.