The Sting | 3 December 2024EBRD makes €50 million equity investment in Croatia’s Podravka Agri
The European Bank for Reconstruction and Development (EBRD) is making an equity investment worth €50 million in Podravka Agri, a new subsidiary of Croatia’s Podravka Group.
The investment will support Podravka Agri’s acquisition of Fortenova Group’s agricultural division, which includes Belje plus, PIK-Vinkovci plus, Vupik plus, Energija Gradec, Belje Agro-Vet plus and Felix plus. Podravka Agri will manage the newly acquired agricultural segment, with the purchased companies continuing to operate as independent entities.
Through its investment, the EBRD will support Podravka Agri in restructuring Fortenova Group’s agricultural divisions. The project aims to enhance the acquired companies’ competitiveness through a comprehensive value creation plan, including the adoption of sustainable farming practices. It also focuses on improving the companies’ corporate governance to strengthen strategic decision-making capacity following the acquisition.
Charlotte Ruhe, EBRD Managing Director for Central and South Eastern Europe, said: “We are pleased to announce our participation in one of the largest acquisitions in the region in recent years. It is an honour to be able to provide support to Podravka, our longstanding client, in this significant endeavour. This acquisition is an exciting opportunity and, in collaboration with Podravka, we are committed to unlocking its full potential by leveraging the EBRD’s track record in the food and agribusiness sector across south-eastern Europe.”
Martina Dalić, President of the Management Board of Podravka, said: “By signing this agreement with the EBRD, we have taken an important step towards finalising the acquisition of the agricultural segment of the Fortenova Group. Our partnership with the EBRD will enable the transfer of global best practices in the management of agricultural companies and further strengthen corporate governance in the newly established company, Podravka Agri. We are convinced that our cooperation will contribute to the achievement of ambitious plans for the modernisation and development of the acquired companies and their further positioning as leaders in Croatian agriculture. The employees of these companies will remain at the centre of our plans, as people are the foundation of all the successes of the Podravka Group.”
Podravka Group, a longstanding client of the Bank, is a Croatian multinational company. It operates in two segments, nutrition and pharmaceuticals with a portfolio of more than 1,800 products. Over the last two decades, the Bank has provided financing to Podravka Group across the capital-structure spectrum, from equity and energy-efficiency loans to a large, syndicated loan.
The EBRD has invested more than €4.8 billion in 254 projects in Croatia to date. The Bank’s focus is on supporting efforts to accelerate the reform process, leveraging the benefits of European Union accession to advance transition, and restructuring and commercialising public-sector enterprises.
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SeeNews | 26 July 2024
by Annie Tsoneva
July 26 (SeeNews) - Croatia’s Fortenova Group said on Friday it signed an agreement to sell its agriculture division to local food and pharmaceuticals producer Podravka.
"The value of the transaction on a cash-free/debt-free basis is 333 million euro ($362 million)," Fortenova said in a press release.
By this transaction, Podravka is buying from Fortenova the companies Belje, Pik Vinkovci, Vupik, Energija Gradec, Belje Agro-Vet and Felix.
Podravka shall acquire the vertically integrated agriculture operations diversified in 12 segments, from growing crops on 32,000 hectares of farmland and operations including pig and cattle breeding farms, winegrowing and viticulture to the production of final meat and dairy products. The companies from Fortenova Group’s agriculture segment also hold biopower plants, silos and the reloading port of Vukovar and employ more than 2,600 people. The agricultural segment is also connected to several hundred subcontractors through contract farms as well as individual contract farmers in crop, vegetable and fruit production.
The completion of the transaction shall follow once the usual regulatory approvals are obtained, Fortenova said.
In a separate press release, Podravka said it will finance this acquisition through bank loans, with the European Bank for Reconstruction and Development (EBRD) expected to be a partner in the transaction.
Agricultural production, along with food and pharmaceuticals, is becoming a new pillar of Podravka Group's business, it said. To this end, Podravka has established a new company - Podravka Agri, which will manage Belje, Vupik, PIK Vinkovci and other entities. The acquired companies will continue to operate as independent trading companies within the structure of the Podravka Group, managed by Podravka Agri.
The EBRD is expected to own a minority stake in Podravka Agri, with Podravka Group holding more than 80%.
Formerly known as Agrokor, Fortenova is Croatia’s top employer and largest retailer and so far it was a major food producer.
Podravka’s shares traded 0.92% higher at 165 euro on Friday afternoon on the Zagreb bourse.
