- The Washington Times - Sunday, May 15, 2005

LONDON - The Vikings are coming, again. This time, Icelandic executives are invading European boardrooms armed with lots of capital and financial degrees.

The remote island nation of 280,000 people located between Europe and Canada appears to have found its best export: entrepreneurs looking to expand their business beyond Iceland’s confining shores.

Eric the Red’s followers, moving onto the island in the eighth century, never could have imagined Icelanders returning their attention to Europe with an eye not toward plunder but corporate acquisition. But that is what has been happening.

In the past year, Icelandic companies have snapped up several well-known retailers in Britain, including the famous toy store Hamleys. Other conquests include a major Danish bank and stakes in sectors from pharmaceuticals to information technology. Analysts and executives predict the United States will be the next major assault.

“I believe that there is very much more to come,” said Gudjon Runarsson, executive director of the Bankers & Securities Dealers Association of Iceland. “We are seeing just the tip of the iceberg.”

Historically rich from its strong fishing industry, Iceland built on that wealth wit h the deregulation of its financial markets and the privatization of many state businesses in the 1980s and 1990s. The Icelandic Stock Exchange soared by 90 percent last year.

Gross domestic product per capita is approaching $36,000, the sixth-highest in the world. Last year, the $10.5 billion GDP was slightly more than half the assets of the country’s biggest bank, Kaupthing Bank.

All that wealth contrasts with a national economy the size of a moderate city, leaving entrepreneurs to search for more opportunities abroad.

Leading the charge is the Baugur Group, which expanded from one Icelandic discount store in 1989 into a company that owns or has stakes in dozens of major retailers. In the past few months, Baugur has bought stores in Britain, including Hamleys and clothing shops Oasis and Karen Millen, and is now Britain’s largest private company. It is also part of a consortium that bought Copenhagen’s flagship department store, Magasin du Nord, and has joined another group in a bid for British supermarket chain Somerfield.

Baugur’s chief executive officer, Jon Asgeir Johannesson, is notoriously press-shy, but otherwise has much in common with Iceland’s other leading executives. Almost all of them are younger than 40 and partly educated abroad.

Hreidar Mar Sigurdsson, the chief executive officer of Kaupthing Bank and one of the youngest of the bunch at 34, presides over a company that has doubled in size since 1996. Mr. Sigurdsson has wasted little time since taking the top job in December, announcing a $1 billion bid for Singer & Friedlander Group PLC, a 98-year-old London investment bank, last month.

Kaupthing also spent $1.3 billion to take over Denmark’s FIH bank last year, has a 25 percent stake in British chain Laurel Pub Co. and has an equity stake in Karen Millen.

Icelanders may be driven overseas by the constricting nature of their small home market, but many think their success lies in factors that include the tendency of Icelanders to study abroad and the deregulation of the local financial market in the 1990s.

“Iceland is situated between Europe and the States. For quite a long time Icelanders have had good relations with both worlds, seeking education from the best schools,” said Fridrik Johannsson, managing director of Burdaras Investment Co., which has made successful investments in emerging markets in Central and Eastern Europe.

“They are probably good at networking with different people.”

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