Estonia's largest agricultural group, Agrone, has completed the purchase of two Latvian dairy producers, Rīgas piena kombināts and Valmieras piens, ERR News reports. Using its parent company as the buying vehicle, Agrone Group took over the full, 100 percent shareholding in Food Union Management, the entity holding majority stakes in both companies, buying out the previous owner, Food Union Luxembourg Holdings II S.à r.l.
Before closing, the deal first needed a green light from competition regulators in both Estonia and Latvia, and the bank SEB provided the financing, ERR News reports. The two sides agreed not to disclose the price. Agrone chief executive Raul Jeets called the transaction historic for the dairy industries of both countries, pointing to Rīgas piena kombināts' long history and well-known brands.
“Rīgas piena kombināts is a company with almost a century of history, a strong market position
and well-known and beloved brands throughout the Baltics,” Jeets said, according to ERR News. He said combining Agrone's raw milk production with Rīgas piena kombināts' processing, product development and sales expertise should give the combined group a stronger base for growing its business, improving efficiency and strengthening its competitive position.
Artūrs Čirjevskis, chairman of the management board of Rīgas piena kombināts, said the company was pleased the deal had closed and was now part of a Baltic dairy group covering the whole value chain, calling this a long-term ambition. SEB's head of corporate banking, Joosep Kadak, who financed the deal, said Agrone's move shows how a company built on Estonian capital is becoming an integrated Baltic business. ERR News reports that day-to-day operations, along with relationships with employees, customers and suppliers, will not change for now, while Agrone and the Latvian companies work out a joint strategy.
Source: ERR News, . The text above is our own summary; the words in quotation marks are the source's.
What this means for an Estonian entrepreneur
An Estonian company buying a business abroad should line up the financing, any competition-authority clearance the deal requires and the sale and purchase documents together — Agrone's purchase closed only after the Estonian and Latvian competition authorities approved it and with bank financing in place — and should start the documentation as early as the financing talks with its bank.
We prepare the sale and purchase documents when an Estonian company buys or sells a business. Documents of an Estonian company sale or purchase