Foodstuff, Investments, Latvia, Markets and Companies, Mergers and take-overs

The merger requires a clearance by the Competition Council of Latvia. No exact timeline for closing is being estimated at this stage and no financial terms of the transaction will be released, as they constitute commercially confidential information, says Mezgaile.

Further consolidation with Food Union is the goal of Rigas piensaimnieks.

"We welcome this transaction as part of building a regional dairy business leader, which has aspirations beyond the Baltic and Central European markets. Further consolidation of the complimentary brands of Rigas piensaimnieks and those of Food Union will strengthen our tripartite strategy, which consists of building the leading dairy producer in the Baltic region, developing a fruitful dairy farming production, and retail ecosystem and expanding into new, significant export markets, particularly in the East," says Andrey Beskhmelnitskiy, founder and shareholder of Food Union Group.

"In this transaction we were above all else attracted by the exceptional product portfolio of Rigas piensaimnieks, which includes such leading brands as "Karums" and "Dzintars". We see a complimentary match between the production processes and product portfolios of Rigas piensaimnieks and the Food Union group of companies without creating any competitive overlap. Rigas piensaimnieks has some outstanding products in cottage cheese, curd snacks and milk dessert categories, which are not served by Food Union," says Nodir Normatov, Investment Director at Meridian Capital.

"We evaluate this transaction to be the next big strategic step in the direction of long awaited dairy industry consolidation in Latvia, that is expected to increase efficiency and productivity, increase raw milk purchase and production volumes, thereby creating clear benefits for consumers and dairy farmers, as well as for competitiveness of Latvian dairy industry among other dairy producing countries in the Northern European milk belt," adds Neeme Jogi, CEO of Rigas piensaimnieks.

Meanwhile, Food Union CEO Normunds Stanevics said that further information on the deal will be provided today.

As reported, one year ago, Beskhmelnitskiy signed an agreement on the acquisition of Tallinn-registered ice-cream and frozen goods business "Premia Foods". The price of the deal was EUR 27.1 million.

Rigas piensaimnieks was founded in 1993. The company's share capital is EUR 1,379,388.

Last year, Rigas piensaimnieks turned over EUR 32.91 million, as compared with EUR 33.82 million in the previous year. The company's profit reached EUR 680,196, as compared with EUR 744,270 in 2013.

The company's shares belong to DCEMF Holdings, a company registered in the Cayman Islands.