Croatian food business Podravka has struck a deal to buy a clutch of food and drink companies from the local agri-food business Fortenova Group.
The total value of the transaction is €333m ($361m).
The completion of the deal depends on receiving approval from the Croatian Competition Agency and other regional regulatory agencies, Podravka said in a statement.
Podravaka had been appointed as “the preferred partner” for the transaction earlier this month. It had been required to pay a deposit of €15m for the takeover of Fortenova’s six agri-food subsidiaries.
The brands in the deal include fruit and vegetables processor Pik-Vinkovci and grains wholesaler Felix.
Podravka is also taking over Belje which produces wines, dairy products, cured meats and tomatoes under its namesake brand for the domestic and global markets.
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By GlobalDataAnother food and beverage group included in the deal is Vupik, which works in cattle and pig farming and cereals and vegetable growing. It also produces a range of Grasevina and Frankovka wines under the labels Goldschmidt and Golubica.
Podravka said it expects the transaction to solidify the group’s “position as one of the most significant and largest domestic companies, with the majority of its revenue generated from international markets”.
Following the acquisition, these companies will sit in a third category within Podravka called Podravka Agri, accompanying its Food and Pharmaceuticals businesses.
Podravka is funding the purchase through commercial bank loans. The European Bank for Reconstruction and Development (EBRD) has been named as one of the partners financing the deal.
The EBRD will own a minority stake in Podravka Agri unit, while Podravka will own more than 80% of the shares.
Speaking on the deal, Martina Dalić, president of Podravka said: “This acquisition signifies modernisation and increased efficiency in crop and vegetable production, adherence to the highest European standards in livestock farming, improved relationships and expanded network of cooperatives, and a strengthened market presence of the Belje and Baranjka brands.
“These goals cannot be achieved overnight, but Podravka’s current success and strength assure that our plans for these companies are both realistic and attainable.
“Honouring the long-standing traditions of agricultural production – centuries-long in the case of Belje – we will continue to develop these companies as leaders in Croatian agriculture and models of best practices in crop and livestock production and viticulture.”
Dalić added that “workers and the improvement of their material status will remain our priority” following the acquisition.
