Oslo, June 02, 2005

Nutri Pharma ASA announces today that it entered into an agreement on 1 June, 2005 to acquire 100% of the shares of the company Meridian International Group Ltd. (`MIG`). This agreement replaces the agreement publicly announced 19 October 2004 in which Nutri Pharma was intended to own 51% of a company concerning health care and nutrition products only.

MIG was established in March 2005 and is a Malta-registered marketing and distribution company, which since July 2003 (via the companies Meridian Art & Meridian Beauty) has achieved strong sales growth in Russia and several other former Soviet Union states based on direct network sales of art products and from September 2004 also skin care & cosmetics products. During April 2005 the sale of NutriPro (branded as Nutrilett in the Nordic countries) was launched in Russia and former Soviet Union by MIG.

As of May 2005, the direct sales network of MIG consisted of a total of approximately 130,000 members, of which 10-15% is defined by MIG as active. On average, this distribution network has grown by approx. 7,000 members per month during 2004/05, and had monthly revenues varying between Euro 1.2 - 1.8 million prior to the launch of NutriPro in April 2005

The main terms of the Agreement are:

Nutri Pharma will acquire all shares in MIG in exchange for 24,000,000 shares in Nutri Pharma, of which 18,000,000 are new shares issued by Nutri Pharma and 6,000,000 are treasury shares held by Nutri Pharma. The implicit valuation and purchase consideration for MIG (based on the closing price of NOK 3,20 of the Nutri Pharma Share 31 May, 2005) is, thus, NOK 76,800,000.
The acquisition of the shares in MIG will take place immediately. However, the final consummation of the transaction is conditional upon the general meeting of Nutri Pharma approving the new share issue.
MIG is granted exclusive distribution rights for NutriPro in Russia and several countries in the former Soviet Union.
MIG has entered into services agreements with the key individuals responsible for the initial establishment of the sales network of MIG. These individuals will continue to manage and further develop the sales and distribution network on behalf of MIG and will for these services receive remuneration based on the sales revenues generated through the network. Depending on the sales levels the total fees will vary between 17.5-31 % of the sales revenues of MIG.
As these individuals, directly or indirectly, are the current owners of the shares of MIG, they will become shareholders of Nutri Pharma, following the consummation of the transaction.
The rationale for the acquisition of MIG is that it gives Nutri Pharma access to an established and fast growing distribution network for its products in several markets. The broadened product portfolio will have the potential of enhancing Nutri Pharma`s profitability. The original strategy was to enter into licence agreements with large international distributors of health products and receiving royalty payments from the sales. This strategy has not been successful, and Nutri Pharma has consequently over the last 3 years explored various alternatives.

Nutri Pharma has evaluated alternative distribution strategies for its products and decided in 2004 to focus its resources on the development of a direct sales project in cooperation with a partner with extensive distribution experience from Russia and the CIS countries (former Soviet Union). This approach would combine a strong product portfolio, unique distribution outside the traditional channels with one of the leading direct sales networks in these markets. This strategy shift was communicated to the shareholders in conjunction with the voluntary offer made by Lars Høie 19 Oct. 2004.

The new R&D strategy implies no further basic research and clinical studies. The main focus will be product adjustments as well as improvement of existing products according to new customer groups and/or new application areas.

As MIG was established in March 2005 there are no audited financial statements for MIG. In April 2005 MIG launched the sale of NutriPro and MIG recently acquired the distribution rights for the art and cosmetic products previously held by the companies Meridian Art and Meridian Beauty. The prospectus will include pro forma figures.

Fondsfinans ASA has been hired by Nutri Pharma ASA to prepare a prospectus for the transaction. The prospectus will be distributed to the shareholders prior to listing of the new shares provided that the extraordinary shareholders meeting planned w/c 20 June 2005 approves the issuance of new shares.

The main terms and the timetable for the share issue are:
18 mill. shares, each with a nominal value of NOK 0.25, will be issued at NOK [3,20] per share. The shares will be subscribed by the owners of MIG in a right issue of new shares against in-kind contribution of the MIG shares in June 2005 at an Extraordinary General Meeting. The owners of the new shares will sign a 12 month lock-up agreement with Fondsfinans for 20.520.000 of the shares.

The summons for the extraordinary shareholders meeting containing the proposed resolutions and the independent expert description of the in-kind contribution will, in accordance with the by-laws of Nutri Pharma and Lov om allmennaksjeselskaper, be distributed to the shareholders of Nutri Pharma 14 days prior to the general meeting.

Nutri Pharma ASA
Nutri Pharma is one of the global leaders in soy technology for treatment and prevention of life-style related diseases and has developed unique products, protected by a broad patent portfolio and documented by extensive clinical studies, in the following fast-growing areas:

Weight management and meal replacement products
Dietary supplements for female health, hearth health and sport nutrition
Functional foods and dietary supplements for cholesterol reduction
Soy proteins and ingredients
In today`s society, the over-consumption of food and limited physical activity means that lifestyle-related diseases like obesity, hyperlipidaemia and type 2 diabetes
are on the increase. Nutri Pharma has developed a range of patented natural products, based on specialised soy ingredients. Since 1989 these products have been successful in clinical trials and pharmaceutical documentations, as well as in the market place. Nutri Pharma`s head office is located in Oslo, Norway, and the company`s shares are traded on the Oslo Stock Exchange.

External link: www.meridianinternational.net

 

For further information please contact:
Trond Syvertsen, CEO +47 23310880